(Translation)
This document is an English translation of the notice for the general meeting of shareholders originally
written in Japanese. This translation was made for reference purpose only and all warranties, and inparticular the accuracy of this translation, are hereby disclaimed.

(Securities Identification Code: 6703)
June 3, 2009

NOTICE OF 85TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders,Oki Electric Industry Co., Ltd. (the “Company”) would hereby like to inform you that the 85th
ordinary general meeting of shareholders will be held as follows. We would be grateful if you
could attend the meeting.
Those who will not be able to attend the meeting are kindly requested to review the attached“Reference Documents for the General Meeting of Shareholders” and exercise their voting rights
in one of the following ways no later than 5:15 p.m., June 24 (Wednesday), 2009 (JST).

[Exercise of voting rights via postal mail]Please indicate your approval or disapproval for each of the proposals in the space provided on
the ballot and return the ballot to the Company. (There is no need to affix your signature or
registered seal.)[Exercise of voting rights via electronic means (Internet)]
Please read the appended “Instructions for the Exercise of Voting Rights via the Internet,” andindicate your approval or disapproval online via the designated website at http://www.itsoukai.com/. There is no need to mail the ballot if you choose to vote via Internet.

Yours faithfully,
Katsumasa Shinozuka,
President and Chief Executive Officer
Oki Electric Industry Co., Ltd.
3-16-11 Nishi-shinbashi, Minato-ku, Tokyo-1-

(Translation)

1.
2.

Date and Time:
Location:

Thursday, June 25, 2009, from 10:00 a.m.
Nippon Seinen-kan Hall, 7-1 Kasumigaoka, Shinjuku-ku, Tokyo(The location is different from that last year.)

3. Meeting Agenda
Items to be reported:
1. Business Report, Consolidated Financial Statements and audit results of theConsolidated Financial Statements by the Account Auditor and the Board of
Corporate Auditors for the 85th fiscal year (from April 1, 2008 to March 31,
2009)
2. Non-consolidated Financial Statements for the 85th fiscal year (from April 1,2008 to March 31, 2009)
Items to be resolved:
Agenda 1:
Agenda 2:
Agenda 3:

Partial Amendment to the Articles of Incorporation
Election of Two (2) Directors
Election of One (1) Corporate Auditor* If you are attending the meeting in person, please submit the enclosed ballot at the reception desk of themeeting.
* The Company has provided the Notice of 85th Ordinary General Meeting of Shareholders on its Internet
website (http://www.oki.com/). Any amendment to the Company’s Reference Documents for the
General Meeting of Shareholders, the Business Report, and the Consolidated and Non-consolidated
Financial Statements will be announced on the website.

-2-

(Translation)

Business Report(From April 1, 2008 to March 31, 2009)1.

Status of the OKI Group(1) Operating progress and results
In the current consolidated fiscal year ended March 2009, we at OKI Group (the“Group”) achieved a surplus because it recorded consolidated sales of ¥545.7 billion andconsolidated operating income of ¥0.4 billion.
As compared with the previous
consolidated fiscal year, consolidated sales decreased by 24.2% and consolidated operating
income decreased by ¥5.8 billion. Consolidated recurring loss increased by ¥2.3 billion
from a loss of ¥3.9 billion in the previous consolidated fiscal year to ¥6.2 billion. With
respect to consolidated net income or loss, the Group recorded a loss on revaluation of
inventories of ¥10.6 billion due to a change of valuation standards for inventories upon
application of the Accounting Standards for Inventory Valuation and for other reasons, aloss of ¥5.2 billion as a result of transfer of semiconductor business, a reversal oftranslation adjustments of ¥7.4 billion and other losses as extraordinary losses andconsequently recorded a loss of ¥45.0 billion compared with an income of ¥0.6 billion in
the previous consolidated fiscal year, a year-on-year decline of ¥45.6 billion.
During the current consolidated fiscal year, the worldwide economy was in a
slowdown and in a severe situation due to a worldwide recession stemming from thefinancial crisis in the U.S. In the U.S., the economic downturn as a result of the subprime
mortgage issue and high oil prices were rapidly aggravated following the financial crisis
stemming from the bankruptcy of a major securities company last September. Changes in
the U.S. economy, which had been an engine of the global economy, expanded to Europe,
Japan, and emerging countries and resulted in recession and stagnation of the global real
economy, including a decline in stock prices and real estate prices, stagnant consumption, asignificant decrease in corporate capital expenditure, and an accompanying worsening
employment situation. At present, despite favorable outlooks such as stable stock prices
and exchange rates and recovery in production at some companies, the situation is stillsevere and the outlook is unclear.
The OKI Group is trying to transform its business structure in order to establish acontinuously profitable business constitution even in a significantly changing management
environment as mentioned above. As part of the acceleration of selection andconcentration of businesses, one of our policies, after establishing a semiconductor businesscompany last October, the Group transferred 95% of the shares of said company to ROHM
Co., Ltd. Due to this transfer and downturn in the semiconductor business until thesecond quarter of the consolidated fiscal period, in the consolidated fiscal year under review,
sales at the semiconductor business decreased by ¥84.1 billion and operating income
decreased by ¥8.9 billion as compared with the previous consolidated fiscal year.
Sales other than the sales of the semiconductor business decreased by ¥89.9 billion-3-

(Translation)
due to saturation in demand for postal privatization, appreciation of the yen, deteriorationof the economic environment, and other reasons. Among other things, components
businesses relating to power supply units and motors, which are independent businesses ofsubsidiaries, and business of production on commission recorded a significant decrease insales due to deterioration of the economic environment. At the same time, operating
income increased by ¥3.2 billion because factors which cause lower profits – such as lower
marginal profits in association with decrease in sales and lower prices – were covered by an
improvement in profitability due to the decrease in sales of low-profit businesses, reductionof production and procurement costs, and thorough containment of fixed and other costs.
Non-consolidated results followed a trend similar to that for consolidated results.
Sales for the term under review stood at ¥271.1 billion, down 33.7% year-on-year.
Operating loss decreased ¥4.5 billion year-on-year to ¥8.5 billion from a loss of ¥13.0
billion in the previous year. Recurring loss improved ¥3.8 billion from a loss of ¥11.9
billion in the preceding year to a loss of ¥8.1 billion. Net loss also dropped ¥33.5 billion
to a loss of ¥35.2 billion from a loss of ¥1.7 billion in the previous year.
We deeply regret to say that there will be no payment of dividends to shareholders forthe fiscal year under review.
Consolidated sales by segment are as provided below.
- Net Sales(Unit: billions of yen)under review)

Increase or
decrease

Compared to theprevious year (%)

359.0

302.3

(56.7)(15.8)

185.8
36.7

160.7
28.6

(25.1)(8.1)(13.5)(22.4)

Sub-total

581.5

491.6

(89.9)(15.5)

Semiconductors

138.2

54.1

(84.1)(60.8)

719.7

545.7

(174.0)(24.2)

Segment
Info-telecom
systems
Printers
OthersTotal

FY2007 (reference:

FY2008 (the year

previous year)

The following provides a summary of each segment.
Info-telecom systems
Sales of the financial system business decreased from the previous year due tosaturation in demand for postal privatization and ATM replacement demand in Japan forretail stores, although sales of the domestic branch office terminals to general financial
institutions and of ATMs to the Chinese market increased. In the communications systembusiness, total sales decreased even though the sales of optical-access-related equipment
increased, as the sales of communications equipment to general corporations decreased
because OKI trimmed unprofitable businesses by accelerating selection and concentrationof businesses and because of the severe economic environment. Additionally, sales-4-

(Translation)
decreased in the information system business as sales of systems to general corporations
decreased due to the economic environment and the trimming of unprofitable businesses.
As a result, sales to third parties decreased by 15.8% to ¥302.3 billion as comparedwith the previous consolidated fiscal year. Meanwhile, with respect to operating income
and loss, even though marginal profits decreased due to a decrease in sales, an improvementin profitability due to a trimming of unprofitable businesses, thorough containment of costs,
a reduction of production and procurement costs covered this decrease, and the loss of ¥1.7
billion in the previous consolidated fiscal year improved by ¥8.7 billion to a profit of ¥7.0
billion.
Printers
In the printer segment, sales significantly decreased due to the appreciation of the yen.
With regard to sales by product, sales of consumables for business-use color printers (color
NIP) were steady but sales of printers decreased due to lower prices and the severe
economic environment. Shipments of monochrome printers (mono NIP) were almost thesame as in the previous year partly because new products were introduced. Shipments of
dot impact printers (SIDM) decreased due to a shrinking of the overall global market.
As a result, sales to third parties dropped by 13.5% as compared with the previous
consolidated fiscal year to ¥160.7 billion. Operating income decreased by ¥0.8 billion
from ¥8.6 billion in the previous consolidated fiscal year to ¥7.8 billion because of achange in exchange rates and lower prices despite the effects of the reduction in production
and procurement costs and thorough containment of costs.
Semiconductors
The situation of the semiconductor segment until the second quarter of theconsolidated fiscal period was as follows.
Sales of driver LSIs fell because liquid crystal panel manufacturers manufacture LSIs
themselves, sales of P2ROMs fell due to a delay in development of new products, and salesof other products also fell due to market deterioration. In addition, sales were affected by
the yen’s appreciation against the dollar. As a result, sales to third parties were ¥54.1
billion. Operating loss was ¥5.1 billion due to this decrease in sales.

-5-(Translation)(2) Capital expenditure
Capital expenditures for the fiscal year equaled ¥15.9 billion.
Investment amounts by segment were as follows.
(Unit: billions of yen)Segment

Amount ofcapitalexpenditure

Info-telecom systems

4.1

Printers

3.7

OthersSub-total

2.5
10.3

Semiconductors

5.6

Note:

Major investments
ATM products and cash management terminals for financial andretail store markets; investments in research, development andproduction of new products for network service and network
infrastructure businesses
Investments in R&D, development and production activities
relating to business-use printers

Investments in R&D, development and production of new
products, including logic LSIs, system LSIs and systemmemories, etc.

Total
15.9
The Company spun off its semiconductor business and transferred the business to a newly establishedcompany, Oki Semiconductor Co., Ltd. The amount of capital expenditure in the semiconductors
segment is the amount recorded before 95% of the issued shares of the newly established company wastransferred to ROHM Co., Ltd.
In addition, as a result of this share transfer, the facilities for the semiconductor business of theCompany and consolidated subsidiaries transferred to the newly established company are no longer
major facilities of the OKI Group. The major facilities are as follows:(As of September 30, 2008)

Classification

Company

Domestic subsidiary
Overseas subsidiary

Name of business place
Hachioji District, Technology
and Production Division
Miyazaki Plant
Miyagi Plant
Miyazaki Oki Electric Co.,
Ltd., Headquarters Plant
Oki (Thailand) Co., Ltd.,
Headquarters Plant

Details of facilities
Development andproduction facilities
Production facilities
Production facilities

Book value (billion yen)
15.4
14.2
21.2

Production facilities

1.2

Production facilities

4.0(3) Financing
Funds required for the term under review were obtained from our own funds andborrowed funds.
Borrowing funds are mainly long-term borrowings, which are used for the scheduled
repayment of long-term borrowings and the redemption of corporate bonds.
(4) Transfer of business, spin-off(i) After spinning off its semiconductor business and establishing Oki Semiconductor
Co., Ltd. as of October 1, 2008, the Company transferred 95% of the issued shares of
Oki Semiconductor to ROHM Co., Ltd.
(ii) The Company spun off its telecom division related to the next-generation networks“NGN” and corporate networks, to make it independent of the Company as of
October 1, 2008, and established Oki Networks Co., Ltd.

-6-

(Translation)(5) Future challenges(i) Business conditions affecting the OKI Group are continuing to change more quickly
and dramatically than anticipated because of accelerated globalization, saturation of thedomestic market, and increasingly common customer demand for investment efficiency.
Under these conditions, the Group aims to be a key player of the “e-society” in whichubiquitous service is rapidly spreading and to pursue profit increases and growth as acompany with stable profits. Therefore, we adhere to three policies in the measures for“Revamp Business Structure,” each of which have been formulated to reestablish
profitability and to take measures without fail. In this section, we would like to show
again the three policies of these measures.
i.

Accelerate business selection and concentration
The Group will classify the businesses into the following three business categories inaccordance with the business evaluation standards, such as sales, operating income, market
growth rate, share, synergy, and differentiation factors in order to accelerate the selection
and concentration of businesses. For focus businesses, the Group will actively devoteresources toward further increases in sales and will also create new businesses. For stableearnings businesses, the Group will maintain and increase stable earnings by promoting
efficiency. For businesses becoming profitable, the Group will aim to thoroughly makethe business profitable while also considering consolidating, spinning-off, and sellingbusinesses which are not expected to be profitable.
ii.

Revamp towards a more efficient management style
To establish an effective group operating structure which is capable of coping with
rapid changes in the business environment, the Group will accelerate a thorough reductionof fixed costs and consolidation and abolishment of group companies. To thoroughly
reduce fixed costs, we will reduce costs to third parties, streamline clerical sections such as
corporate sections, and consolidate and abolish bases. To consolidate and abolish groupcompanies, we will review profitability and create new businesses and comprehensive
service businesses by way of consolidation.
iii.

Develop strong businesses with strong products
The OKI Group will focus on the info-telecom and mechatronic businesses, the main
products of which are ATMs and printers. Consequently, we will reexamine the Group’s
resources (personnel, goods, businesses, technologies, products, etc.), and combine,
integrate, and harmonize these resources by focusing on their effective use, and form
alliances with global partners, with the goal of reestablishing differentiated competitivenessthat only OKI can achieve.
(ii)Management strategies by business segment are as follows:i.

Info-Telecom Systems-7-

(Translation)
In the info-telecom system segment, we will adapt ourselves to the era of NGNs
which is essential to the provision of Ubiquitous Service and focus on the expansion ofbusiness based on info-telecom technology and which has the advantages of mechatronics.
In the telecommunications market, we will aim to maintain and increase the revenueof the legacy network, about which we have a wealth of know-how, and also actively
expand business opportunities for network migration using such know-how. Further, we
will focus on and expand business in the three edge domains in network services – theenterprise edge, consumer edge, and carrier edge domains – in which investment is
expected to be made to promote the use of NGN, enabling OKI to take advantage of its
strength.
In the financial market, we will try not only to increase the earning capacity of
hardware, which includes the acceleration of global development of mechatronic businessincluding ATMs by promoting alliances and enhancement of financial online systembusiness, but also enhance the services business, which includes ATM monitoring service
and life cycle management.
Further, for public offices, local governments, and general companies, we will try toreestablish an effective business structure which has strong access to the market based on
the fusion of information and telecommunication, and mechatronics. In the future, we will
enhance the development of energy-saving related technology and focus on the creation ofsolutions for environment, safety, and providing peace of mind.
ii.

Printers
In the printer segment, we will continue to focus on monochrome and color printersand complex machines which utilize the LED light source method with its considerable
advantages over the laser method in terms of size, speed, and resolution. Moreover, withrespect to sales, we will try to enhance OKI’s strong areas, which are not easily influenced
by market forces. First, in the domestic market, we will try to strengthen our alliance withmajor distributors with a focus on a new brand for the office market called COREFIDO, forwhich we provide a five-year warranty without compensation. In the global market, we
will actively advance the expansion of business mainly in the vertical market by taking
advantage of the characteristics of LED printers in addition to the SMB (Small and Medium
Business) market, which will gain in importance in the future. Further, as a supplier offull-line office printers for office use, we will realize a combined sale of balanced productmodels including low-end to high-end printers and multi-function machines and endeavor
to increase earnings.
In the dot impact printer business, we will advance further cost reduction and also
actively develop our business in emerging markets by releasing low-end printers to increasestable earnings.

-8-

(Translation)(6) Trends in assets and profit/loss
Trends in assets and profit/loss for the fiscal year under review and the past three
years are as follows.
82nd year (FY2005)

83rd year (FY2006)

84th year (FY2007)

Sales

680.5

billion yen

718.8

billion yen

719.7

billion yen

85th year(current year,
FY2008)545.7
billion yen

Net income

5,058

million yen(36,446)

million yen

567

million yen(45,011)Net income per share

8.27

yen

(56.27)

yen

0.83

yen

(65.90)yen

Total assets

618.9

billion yen

628.4

billion yen

570.8

billion yen

397.0

billion yen

Net assets

133.9

billion yen

116.0

billion yen

101.4

billion yen

58.7

billion yen

Net assets per share

218.96yen

160.13yen

138.55

yen

75.64

yen

million yen

Notes:
1. Parentheses indicate losses.
2. Net income per share is computed based on the average number of shares during the year (weighted average).
Net assets per share are computed based on the number of shares of common stock outstanding during theyear. These figures exclude treasury stocks.
3. Beginning in the 83rd year, the Company adopted “Accounting Standards for Presentation of Net Assets in
Balance Sheets” (Corporate Accounting Standards No. 5, December 9, 2005) and “Guidelines for the
Application of Accounting Standards for Presentation of Net Assets in Balance Sheets” (Guidelines for the
Application of Corporate Accounting Standards No. 8, December 9, 2005).
4. Assets and sales significantly decreased in the 85th year mainly because the sales of the semiconductorbusiness have not been recorded since the third quarter of the current consolidated fiscal year as a result of
the transfer of said business.

(7) Status of major subsidiaries(i) Status of major subsidiaries
Name

CapitalCompany’s
voting rightratio

Oki Wintech Co., Ltd.

2,001 million yen

53%

Oki Data Corporation

17,000 million yen

100

Oki Customer Adtech Co., Ltd.

2,050 million yen

100

Oki Networks Co., Ltd.

490 million yen

100

Oki Data America, Inc.
Oki Europe Ltd.
Oki Electric Industry(Shenzhen) Co., Ltd.

10 million U.S. dollars
33 million pound sterling

100*
100

50 million Renminbi

100*

Major business
Design and electronic works andelectronic telecommunications
works
Manufacturing and sales of printers
Maintenance, construction andsales of information processing
equipment and telecommunications
equipment
Marketing in thetelecommunications business fieldand planning, development, andsale of products
Sales of printers
Sales of printers
Manufacturing of information
processing equipment and printers

Notes:
1. Figures marked with an asterisk (*) indicate the ratio of voting rights held by subsidiaries of the Company.
2. The number of subsidiaries of the Company decreased by 20 as a result of transfer of semiconductorbusiness. Major subsidiaries counted in the number of decreased subsidiaries are as follows: Miyagi Oki
Electric Co., Ltd., Miyazaki Oki Electric Co., Ltd., Oki (Thailand) Co., Ltd., and Oki America, Inc.
3. Oki-Kansai Service Co., Ltd. and other eight companies which were the consolidated subsidiaries of theCompany ceased to exist as a result of the merger with Oki Customer Adtech Co., Ltd., a consolidated
subsidiary of the Company, on December 1, 2008.

(ii)

Major partners-9-

(Translation)--

Major technical partners:
Alcatel-Lucent (US)International Business Machines Corporation (US)Canon Inc.
Major business partners:
Hewlett-Packard Company (US)Cisco Systems G.K.
ACCESS Co., Ltd.

(8) Major businesses
The OKI Group offers as its core businesses info-telecom systems/devices,semiconductors, and printers as well as related solutions and services.
Major business items include the following.
Segment

Info-telecom systems

Printers

Business items
Financial systems, automation equipment systems, ITS-related systems, electronic
government-related systems, ERP systems, computer network-related equipments,
informational network terminal equipments, security systems, IP telephony systems,
corporate telecommunications systems, CTI systems, image delivery systems,
electronic switching equipment, digital transmission equipment, opticalcommunication equipment, radio communication equipment, broadband accessequipment, network service, network operational support service, etc.
Color printers, monochrome printers, dot impact printers, multi-purpose printers,
etc.

(9) Major offices
Our major offices are as follows.
Name

Classification
Head office

Branch offices
Oki Electric Industry Co., Ltd.

Business offices
Research institutes

Location
Minato-ku, Tokyo
Hokkaido region (Sapporo, Hokkaido),
Tohoku region (Sendai, Miyagi),
Chubu region (Nagoya, Aichi),Kansai region (Osaka, Osaka),
Chugoku region (Hiroshima, Hiroshima),
Shikoku region (Takamatsu, Kagawa), andKyushu region (Fukuoka, Fukuoka)
Minato-ku (Tokyo), Warabi (Saitama), Honjo(Saitama), Takasaki (Gunma), and Numazu(Shizuoka)
Hachioji (Tokyo), Warabi (Saitama) and Osaka(Osaka)Oki Wintech Co., Ltd.

Head office

Shinagawa-ku, Tokyo

Oki Data Corporation

Head office

Minato-ku, Tokyo

Oki Customer Adtech Co., Ltd.

Head officeKoto-ku, Tokyo

Oki Networks Co., Ltd.

Head office

Minato-ku, Tokyo

Oki Data America, Inc.

Head office

New Jersey, USA

Oki Europe Ltd.

Head office

Middlesex, UK

Oki Electric Industry (Shenzhen)Co., Ltd.

Head office

Guangdong, China- 10 -

(Translation)(10) Employees(i) Employees of the OKI Group
Segment

Number of employees

Info-telecom systems

10,103

Printers

5,782

Other

1,158

Company-wide (shared)

372

Total

17,415Note:

The number of employees decreased by 5,225 from the end of the previous consolidated fiscal year
mainly because of the transfer of the semiconductor business.

(ii)

Employees of Oki Electric Industry

Number of employees
Average age
Average length of service
3,182 (decreased by 2,131 from the end of the previous year)
41.2
19.0
Note: The number of employees decreased by 2,131 from the previous consolidated fiscal year mainly becauseof the transfer of the semiconductor business and the establishment of Oki Networks Co., Ltd.

(11) Major creditors
Major creditors of the OKI Group are as follows:
Creditor

Loan balanceBillion yen

Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Mizuho Trust & Banking Co., Ltd.
Development Bank of Japan Inc.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

37.6
26.8
11.6
11.0
10.2

(12) Other significant events of the OKI GroupThe Company relocated its head office to 3-16-11 Nishi-shinbashi, Minato-ku, Tokyo as ofAugust 11, 2008.

- 11 -

(Translation)
2.

Shareholders’ Equity
(1)
(2)
(3)
(4)
(5)

Number of shares authorized to be issued by the Company:
2,400,000 thousand shares
Number of outstanding shares:
684,256 thousand shares (including 1,295 thousand shares of treasury stock)
Number of shareholders: 112,673
Shareholders holding 10% or more of outstanding shares (excluding treasury stock):
None
Major shareholders (Top 10):
Number ofshares held
(thousand shares)

Name of shareholder
Meiji Yasuda Life Insurance Company

34,000Japan Trustee Services Bank, Ltd. (trust account 4G)

28,124

Japan Trustee Services Bank, Ltd. (trust account)

20,112

Japan Trustee Services Bank, Ltd. (trust account 4)

16,862The Master Trust Bank of Japan, Ltd. (trust account)

15,517

Oki Denki Group Employees’ Shareholdings Committee

13,125

Mizuho Corporate Bank, Ltd.

13,000

Sompo Japan Insurance Inc.

12,986

The Dai-ichi Mutual Life Insurance Company

9,380

Nippon Life Insurance Company

4,531- 12 -

(Translation)
3. Equity Warrants(1) Equity warrants granted to the Company’s officers as consideration for theirperformance of duties(i) Number of equity warrants
1,029(ii) Type and number of shares subject to equity warrants
1,029,000 shares of the Company’s common stock (1,000 shares per equity warrant)(iii) Status of equity warrants held by the Company’s officers

Directors(excluding outside
directors)

AuditorsIssued Number

Exercise period

No. 2 equity warrant (354 yen)
(Issued on July 18, 2003)
No. 3 equity warrant (458 yen)
(Issued on July 20, 2004)
No. 4 equity warrant (406 yen)
(Issued on July 20, 2005)
No. 5 equity warrant (277 yen)
(Issued on July 28, 2006)
No. 6 equity warrant (277 yen)
(Issued on July 28, 2006)
No. 7 equity warrant (248 yen)
(Issued on July 27, 2007)
No. 8 equity warrant (248 yen)
(Issued on July 27, 2007)
No. 3 equity warrant (458 yen)
(Issued on July 20, 2004)
No. 4 equity warrant (406 yen)
(Issued on July 20, 2005)

July 1, 2005
to June 26, 2013
July 1, 2006
to June 28, 2014
July 1, 2007
to June 28, 2015
July 1, 2008
to June 28, 2016
July 1, 2008
to June 28, 2016
July 1, 2009
to June 25, 2017
July 1, 2009
to June 25, 2017
July 1, 2006
to June 28, 2014
July 1, 2007
to June 28, 2015

Number ofequity warrants

Number ofholders

260

8

166

9

175

9

102

5

40

4

235

7

33

2

10

1

8

1

(2) Equity warrants issued to employees in consideration of performance during the fiscal
year under review
The Company did not issue equity warrants in the fiscal year under review.
(3) Other significant matters concerning equity warrants
Status of convertible bonds with equity warrants
No. 32 equity warrants attached to convertible
bonds without warranty (issued on June 7, 2006)
Date of resolution for issuanceMay 23, 2006
Number of equity warrants
24Type and number of shares to be acquired by rights
Common stock: 41,237,113 shares
Issue price of the rights
Granted free of charge
June 8, 2006 to
Exercise period
June 6, 2011
Exercise price¥291 (Note)
Balance of bonds with equity warrants¥12 billion
Note: The conversion price will be revised after the trading day following the fourth Friday of March, June,
September and December (hereinafter the “determination date”) to an amount equivalent to 93% of theaverage closing price of our common stock in ordinary trading on the Tokyo Stock Exchange for the
successive five trading days up to the determination date. The revised conversion price shall not be
below ¥291.

- 13 -

(Translation)

4.

Corporate Officers(1) Names, etc. of Directors and corporate auditors
Note 1*X

Position
President

Name
Katsumasa Shinozuka*X

Director and Vice
President

Naoki SatoX

Senior Vice President

Hideichi Kawasaki

X

Senior Vice President

Keiichi Fukumura

X

Senior Vice President

Masayoshi Matsushita

X

Senior Vice President

Masao Miyashita

X

Senior Vice President

Yutaka Asai

Director
Director
DirectorStanding Auditor
Standing Auditor
Standing Auditor
AuditorHarushige Sugimoto
Hironori Kitabayashi
Minoru Morio
Takahisa Inagawa
Yoshikatsu Shiraishi
Noriyuki Kandori
Seiji Nishi

Status or main duties
CEO
CFO
Operation supervision
In charge of Management Planning Division, Group
Administration Division and General Affairs Division
In charge of Financial Business Division
In charge of Public Relations Division
CCO
In charge of CSR Division, Accounting & Control Division
and Internal Auditing Division
President & CEO, Oki Development Co., Ltd.
CIO; in charge of telecommunications businessIn charge of Information Planning Division, Systems Platform
Center, and Business Support CenterIn charge of information systems businessIn charge of Sales & Marketing Administration Division
CTO; in charge of system equipment businessIn charge of Research & Development Center
President & CEO, Oki Data Corporation
President & CEO, Oki Engineering Co., Ltd.

CEO: Chief Executive Officer
CFO: Chief Financial Officer
CCO: Chief Compliance Officer
CIO: Chief Information Officer
CTO: Chief Technology Officer

Notes:
1. Asterisk indicates Representative Director. X indicates executive officer.
2. Director Minoru Morio is an outside director.
3. Standing Auditors Noriyuki Kandori and Seiji Nishi are outside auditors.
4. Changes of Representative Directors after the fiscal year
In accordance with a resolution of the Board of Directors meeting held on March 11, 2009, Hideichi
Kawasaki was appointed as Representative Director and Vice President on April 1, 2009.
5. Executive officers as of March 31, 2009 are as follows (excluding those who concurrently serve as
Directors).
Position
Senior Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer

Name
Masasuke Kishi
Kazuhiro Iritani
Hideto Morizono
Sei Yano
Hidetoshi Saigo
Takao Hiramoto
Hisao Suzuki
Hideichi Kawano
Yasunori Shibata
Toshiya Hatakeyama
Masahiko Morioka

Executive officer

Kazunari Kobayashi

Principal duty
In charge of telecommunications business (Oki Networks)
Head, Kansai Branch
In charge of Info-Telecom Plant
Manager, Management Planning Division
Manager, Carriers Business Division
Manager, System Equipment Business Division
Manager, Enterprise Business Division
Manager, CSR
Manager, Financial Systems Business Division
Manager, Accounting & Control Division
Manager, Sales & Marketing Administration Division
In charge of personnel affairs;
Manager, Human Resources Division- 14 -

(Translation)(2) Compensation paid to Directors and Corporate Auditors
Title
Directors
Corporate Auditors
Total

Number of persons
126
18

Amount of payment¥259 million¥66 million¥326 million

Notes:
1.
The amounts of compensation approved by the 82nd Ordinary General Meeting of Shareholders held on
June 29, 2006 are within ¥600 million per year for Directors and ¥100 million per year for Corporate
Auditors. The amount of compensation for Directors excludes employee wages for Directors who arealso employees.
2.
The number of Directors and Corporate Auditors as of the end of the fiscal year under review is different
because they include those who resigned at the conclusion of the 84th Ordinary General Meeting of
Shareholders held on June 27, 2008.

(3) Outside Directors and Corporate Auditors(i) Major activities in the fiscal year under review(a) Attendance at meetings of the Board of Directors and Board of Corporate
Auditors
Board of Directors meeting(number of meetings in parenthesis)
Attendance
Attendance ratefrequency
Minoru Morio,
Director
Noriyuki Kandori,Corporate Auditor
Seiji Nishi,
Corporate Auditor
Note:

Board of Corporate Auditors meeting(number of meetings in parenthesis)
Attendance
Attendance ratefrequency

16 (16)

100%

-

-

13 (13)100%

12 (12)100%

13 (13)100%

12 (12)

100%

Frequency of meetings with respect to Mr. Noriyuki Kandori, Corporate Auditor, and Mr. Seiji Nishi,
Corporate Auditor, indicates the frequency of meetings after their assumption of office in June 2008.

(b) Major activities
a. Minoru Morio, Director
Making statements mainly based on extensive experience in the electronics
industry, he provided advice and proposals for the Board of Directors tosecure the soundness and appropriateness of decision-making.
b. Noriyuki Kandori, Corporate Auditor
With regard to deliberations of the Board of Directors, he determined thecorrectness of Directors’ managerial decisions. As Standing Outside
Corporate Auditor, he made efforts to formulate appropriate audit opinions for
the Company by attending important meetings, inspecting important approval
documents, conducting on-site audits of major sections, and cooperating within-house audit sections.
c. Seiji Nishi, Corporate Auditor
With regard to deliberations of the Board of Directors, he determined thecorrectness of Directors’ managerial decisions. Using extensive experienceand knowledge as a Director at other companies over many years, he made- 15 -

(Translation)(ii)

efforts to formulate the Company’s appropriate audit opinions by making
proper statements and implementing, when necessary, adequate activities
concerning performances of the Board of Corporate Auditors.
Total amount of compensation, etc.
¥34 million (for the five individuals)
Note:

The number of Directors and Corporate Auditors as of the end of the fiscal year under review
is different because they include those who resigned at the conclusion of the 84th Ordinary
General Meeting of Shareholders held on June 27, 2008.

- 16 -

(Translation)
5.

Status of Accounting Auditor(1) Name: Ernst & Young ShinNihon LLC
Note: Ernst & Young ShinNihon changed its corporate name as of July 1, 2008, following the change in types ofaccounting auditor.

(2) Compensation, etc.
Amount of payment
1. Compensation, to be paid to the accounting auditor for the fiscal year under review
119 million yen
2. Total sum of cash and profits on other assets that the Company and its subsidiaries
200 million yen
should pay to the accounting auditor
Notes:
1. The Company does not distinguish between auditor compensation regarding (i) auditing in accordance with
the Company Law, and (ii) auditing in accordance with the Financial Instruments and Exchange Law. The
total of these amounts is recorded above.
2. Among major subsidiaries, Oki Europe Ltd. and Oki Electric Industry (Shenzhen) Co., Ltd. have undergone
statutory audits by accounting auditors other than the accounting auditor of the Company.

(3) Contents of non-audit services
The Company has also hired the accounting auditor for “internal management project
advice,” which is a service other than the audits provided in Article 2, Paragraph 1 of theCertified Public Accountants Law, and pays the auditor compensation for that service.
(4) Policy regarding decision to dismiss or not reappoint the accounting auditor
The Board of Corporate Auditors will dismiss the accounting auditor if the auditor
falls under provisions of Article 340 of the Company Law. In addition, if it is deemed
unlikely that the accounting auditor will be able to perform audits properly, the Company,
upon the consent or request of the Board of Corporate Auditors, the Board of Directors will
discuss whether to submit a proposal to the general meeting of shareholders for dismissal or
non-reappointment of the accounting auditor.
6.

Policies and procedures of the Company
System to ensure that Directors in the conduct of their business comply with applicablelaws, regulations and the Articles of Incorporation, as well as other procedures of theCompany, in order to assure the appropriateness of the Company’s operations(1) Procedures to ensure that Directors and employees comply with applicable laws,
regulations and the Articles of Incorporation in conducting their business(i) As the foundation for ensuring compliance, the Company has established the “OKIGroup Charter of Corporate Conduct” and “OKI Group Code of Conduct.”(ii) The Company has established a Compliance Committee chaired by the CCO (chiefcompliance officer) to decide on and examine basic policies regarding complianceprograms.
(iii) In accordance with the basic policies formulated by the Compliance Committee, thedivision responsible for compliance plans, draws up, and promotes specific measures- 17 -

(Translation)such as education and training for Directors and employees. In education andtraining, we aim to raise employee awareness about compliance by utilizing means
such as e-learning.
(iv) The Company provides rules on public-interest disclosure and provides a contact
point for reporting and consultation, aiming to detect any misconduct at its earliest
stages.
(v) The Company stands firmly against antisocial groups that threaten the order andsafety of civil society in cooperation with the police and related organizations, andrefuses to have any relationship with them as a whole.
(2) Procedures to retain and manage information relating to Directors’ conduct ofbusiness
The Company retains and stores information relating to the conduct of business byDirectors as appropriate in accordance with applicable laws, regulations and internal rules.
(3) Rules concerning risk management and other procedures(i) Pursuant to risk management rules, each section of the Company manages risks that
may occur in relation to its main duties. At the same time, the Company has
established a supervisory section to deal with risks needing company-wide
management. This section assesses risks, draws up policies for risk countermeasuresand develops appropriate structures based on such policies.
(ii) If any risk occurs, the Company will set up an emergency countermeasure
headquarters to handle the risk.
(4) Procedures to secure efficient business performance by Directors(i) The Company holds regular meetings of the Board of Directors once a month todecide important matters and supervise the work of Directors.
(ii) The Company holds management meetings, in which executive officers, such as
managing directors and other high-ranking officers participate, to provide for flexible
decision making on fundamental and significant matters in managing the business.
(iii) The Company assigns Directors responsibilities and authority pursuant to rules on
division of duties and authorities.
(5) Procedures to secure appropriate Group (Company and subsidiaries) operations(i) To ensure that Group companies run their operations properly, the Company has
established the “OKI Group Charter of Corporate Conduct” which sets out the values
for the entire Group. In addition, the Company has established the “OKI Group
Code of Conduct” as the code of conduct which all officers and employees of Group
companies should comply with, and is striving to make the code known to all of them.
(ii) The division responsible for compliance implements various measures for promoting
compliance common to the Group through each Group company’s compliance officer.
The Division also determines, through regular monitoring, the implementation statusof such measures by each Group company and reports to the Compliance Committee
on the results.

- 18 -

(Translation)(iii) The Company, in accordance with Group management rules, determines the status ofeach Group company’s management activities and provides advice and guidance.
(iv) To secure the reliability of financial reporting, the Company and Group companies
establish an internal control system for financial reporting in accordance with related
laws and regulations, and strive to maintain and improve that system.
(6) Procedures for employees who assist Corporate Auditors; independence of employees
from Directors(i) The Company assigns employees, who are not subject to Directors’ instructions andorders, as staff to assist Corporate Auditors.
(ii) Any change in such staffing requires the prior consent of the Board of Corporate
Auditors.
(7) Procedures for Directors and employees to report to Corporate Auditors; procedures
for Corporate Auditors to receive other reports(i) If Directors discover anything that may cause significant damage to the Company,
they are required to report the matter immediately to the Corporate Auditors pursuant
to applicable laws and regulations.
(ii) Standing Corporate Auditors attend meetings of the Board of Directors andmanagement meetings in order to understand important decision-making processes
and the status of business operations, as well as to inspect important documentation.
(iii) Directors receive reports on the status of establishing internal control systems andtheir operations from Directors and employees on a regular basis, and may request
Directors and employees to report on matters deemed necessary.
(8) Other procedures to secure effective audits by Corporate Auditors(i) In conducting inspections on the Company’s operations and assets and performing
other audit duties, Corporate Auditors shall conduct audits efficiently and effectively
in close cooperation with the internal audit section.
(ii) Corporate Auditors implement efficient audits by closely cooperating with theaccounting auditor. To this end, Corporate Auditors hold meetings with theaccounting auditor on a regular basis, attend on-site audits by the accounting auditor,
and request reports from the accounting auditor on the progress of audits whennecessary.

Note: indication of amounts
Figures in this business report are indicated as follows.
1. Units of ¥1 million: Figures less than one unit are disregarded.
2. Units of ¥100 million: Figures less than one unit are rounded to the nearest unit.

- 19 -

(Translation)

Consolidated Balance Sheet(as of March 31, 2009)(Unit: millions of yen)Account title

AmountAccount title(Assets)

Amount(Liabilities)

Current assets

Current liabilities

Cash and deposits

61,706

Notes and accounts payable

52,466

Notes and accounts receivable
Finished goods

117,705

Short-term borrowings

109,161

28,110

Other accrued expenses

Work in process

23,37926,930

Others

20,957

Raw materials and supplies

25,213

Others

16,864

Allowance for doubtful receivables
Total current assets(1,284)275,247

Fixed assets
Property, plant and equipment

Total current liabilities

205,965

Long-term liabilities
Bonds

12,000Long-term borrowings

82,605Retirement benefits

34,526

Buildings and structures

24,729Provision for Directors’ retirement benefits

Machinery, equipment and delivery equipment

10,779Others636
2,545

Tool, furniture and fixtures

12,104

Total long-term liabilities

132,313Land

12,770Total liabilities

338,279

Construction in progress
Total property, plant and equipment
Intangible assets

786
61,170(Net Assets)

12,315

Shareholders’ equity
Common stock

76,94034,134

Additional paid-in capital

46,744Long-term loans

1,936

Retained earnings(67,153)

Others15,658Treasury stock

Allowance for doubtful receivables(3,500)Investments and other assets
Investments in securities

Total shareholders’ equity

Total investments and other assets

48,229Valuation, translation adjustments and others

Total fixed assets

121,716

Net unrealized holding gain on other securities(362)
56,168(593)

Loss on deferred hedges(467)

Translation adjustments(3,450)Total valuation, translation adjustments(4,511)and others

Equity warrants
Minority interests in consolidated
subsidiaries

Total assets

396,963- 20 -

79
6,948

Total Net Assets

58,683

Total liabilities and net assets

396,963

(Translation)

Consolidated Statement of Operations(From April 1, 2008 to March 31, 2009)(Unit: millions of yen)Account title

AmountNet sales

545,680

Cost of sales

410,658

Gross profit

135,021

Selling, general and administrative expenses

134,611

Operating income

410

Non-operating income
Interest income

411

Dividend income

860

Corporate brand royalty income

355

Other

1,317

2,945

Non-operating expenses
Interest expense

6,098

Other

3,446

Ordinary loss

9,544
6,189

Extraordinary profit
Gain on sales of investments in securities

509

Compensation for transfer

455

965

Extraordinary loss
Loss on sale and disposition of property, plant andequipment

1,756

Write-downs of investment in securities

801

Provision of allowance for doubtful receivables

654

Loss on natural disaster

1,610

Special retirement payments

2,936

Loss on devaluation of inventories

10,609

Expenses for business restructuring

574

Loss on transfer of business and other

5,217

Loss on recycling of foreign currency translation
adjustments

7,361

Net loss before taxes

31,52336,748

Income taxes

2,366

Income taxes deferred

5,410

Minority Interest

7,776
487

Net loss

45,011- 21 -

(Translation)

Consolidated Statement of Changes in Shareholders’ Equity(From April 1, 2008 to March 31, 2009)(Unit: Millions of yen)
Shareholders’ equity
Common stock
Balance as of March 31, 2008
Changes during the term under review
Net changes during the term under review
Balance as of March 31, 2009

76,94076,940Additional paid-in capital
Balance as of March 31, 2008
Changes during the term under review
Net changes during the term under review
Balance as of March 31, 2009

46,744
46,744Retained earnings
Balance as of March 31, 2008
Decrease due to change in accounting method of foreign subsidiaries
Changes during the term under review
Net loss
Change in scope of consolidation
Net changes during the term under review
Balance as of March 31, 2009
Treasury stock
Balance as of March 31, 2008
Changes during the term under review
Purchases of treasury stock
Net changes during the term under review
Balance as of March 31, 2009

(20,991)(1,042)(45,011)(108)(45,120)(67,153)

(344)
(17)
(17)
(362)

Total shareholders’ equity
Balance as of March 31, 2008
Decrease due to change in accounting method of foreign subsidiaries
Changes during the term under review
Net loss
Purchases of treasury stock
Change in scope of consolidation
Net changes during the term under review
Balance as of March 31, 2009
Valuation, translation adjustments and others
Net unrealized holding gain on other securities
Balance as of March 31, 2008
Changes during the term under review
Changes in items other than shareholders’ equity during the term under review (net)Net changes during the term under review
Balance as of March 31, 2009- 22 -

102,348(1,042)(45,011)(17)(108)(45,137)
56,168695(1,289)(1,289)(593)

(Translation)

Loss on deferred hedges
Balance as of March 31, 2008
Changes during the term under review
Changes in items other than shareholders’ equity during the term under review (net)Net changes during the term under review
Balance as of March 31, 2009
Translation adjustments
Balance as of March 31, 2008
Changes during the term under review
Changes in items other than shareholders’ equity during the term under review (net)Net changes during the term under review
Balance as of March 31, 2009
Total valuation, translation adjustments and others
Balance as of March 31, 2008
Changes during the term under review
Changes in items other than shareholders’ equity during the term under review (net)Net changes during the term under review
Balance as of March 31, 2009
Equity warrants
Balance as of March 31, 2008
Changes during the term under review
Net changes during the term under review
Balance as of March 31, 2009

(271)
(196)
(196)
(467)

(8,132)
4,682
4,682(3,450)(7,708)3,196
3,196(4,511)

79
79

Minority interests
Balance as of March 31, 2008
Changes during the term under review
Changes in items other than shareholders’ equity during the term under review (net)Net changes during the term under review
Balance as of March 31, 2009
Total Net Assets
Balance as of March 31, 2008
Decrease due to change in accounting method of foreign subsidiaries
Changes during the term under review
Net loss
Purchases of treasury stock
Change in scope of consolidation
Changes in items other than shareholders’ equity during the term under review (net)Net changes during the term under review
Balance as of March 31, 2009- 23 -

6,656
291
291
6,948

101,376(1,042)(45,011)
(17)
(108)
3,488
(41,649)
58,683

(Translation)

Notes to Consolidated Financial Statements
Principles for Preparing Consolidated Financial Statements
1.

Scope of consolidation(1) Number of consolidated subsidiaries: 75 companies
Names of major consolidated subsidiaries:
Oki Data Corporation; Oki Customer Adtech Co., Ltd.; Oki Wintech Co., Ltd.;Oki Software Co., Ltd.; Oki Networks Co., Ltd.; Oki Data Americas, Inc.; Oki
Data Manufacturing (Thailand) Co., Ltd.; Oki Europe Ltd.; Oki ElectricIndustry (Shenzhen) Co., Ltd.
(2) Names of major non-consolidated subsidiaries:
Adachi Protechno Co., Ltd. and 23 other companies
Reasons for excluding from consolidation:
Total assets, retained earnings, net sales and net income or loss are individually
and wholly immaterial and have no significant influence.
(3) Changes in scope of consolidation:
Oki Banking Systems (Shenzhen) Co., Ltd. and Oki Electric America, Inc.
were included within the scope of consolidation as they were newly
established; Payment First Corporation was included within the scope of
consolidation because it became a subsidiary after the Company additionallyacquired the shares of that company; and Oki Networks Co., Ltd. was included
within the scope of consolidation because the Company spun off its
telecommunications business and transferred the business to a newly
established company. Further, Oki Semiconductor Technology Shanghai Co.,
Ltd. was excluded from the scope of consolidation because it was liquidated.
Moreover, the following companies were excluded from the scope of
consolidation because in spinning off its semiconductor business andtransferring the business to a newly established company, Oki Semiconductor
Co., Ltd., the Company transferred 95% of the issued shares of the newly
established company to ROHM Co., Ltd. after the Company caused the newly
established company to succeed to the shares of the following companies heldby the Company:
Oki Environment Technologies Inc.; Oki Technocollage, Inc.; Oki
Microelectronics Co., Ltd.; Oki Network LSI Co., Ltd.; Oki Micro Design Co.,
Ltd.; Tama Oki Electric Co., Ltd.; Miyagi Oki Electric Co., Ltd.; Miyazaki Oki
Electric Co., Ltd.; Oki America, Inc.; Oki Electric Europe GmbH; Oki
Electronics (Hong Kong) Ltd.; Oki (France) Sarl; Oki Semiconductor Korea
Co., Ltd.; Oki Semiconductor Singapore Pte. Ltd.; Oki Semiconductor Taiwan
Inc.; Oki Semiconductor (UK) Ltd., Oki (Thailand) Co., Ltd.; and Oki
Semiconductor Shanghai Co., Ltd.

- 24 -

(Translation)
In addition, the following companies ceased to exist because they weremerged with Oki Customer Adtech Co., Ltd., a consolidated subsidiary of theCompany:
Oki-Kansai Service Co., Ltd.; Oki Kanto Service Co., Ltd.; Oki KitakantoService Co., Ltd.; Oki Kyushu Service Co., Ltd.; Oki Shikoku Service Co.,
Ltd.; Oki Chugoku Service Co., Ltd.; Oki Chubu Service Co., Ltd.; Oki
Tohoku Service Co., Ltd.; and Oki Hokkaido Service Co., Ltd.
2.

Application of equity method(1) Number of affiliated companies to which the equity method is applied: 3Name of major company to which the equity method is applied:Oki Electric Cable Co., Ltd.
(2) Names of major non-consolidated subsidiaries and affiliated companies to which theequity method is not applied:
Non-consolidated subsidiaries:
Adachi Protechno Co., Ltd. and 23 other companies
Affiliated companies: Alp Inc. and 12 other companies
Reason for not applying the equity method:
The companies individually have little influence and have no significance as awhole on net income or loss and retained earnings.
(3) Changes in scope of application of the equity method:
Banking Channel Solutions K.K. was included in the scope of application of the equity
method because it was newly established.
Furthermore, Wipro Techno Centre (Singapore) Pte. Ltd. was excluded from the scopeof application of the equity method because in spinning off its semiconductor business andtransferring the business to a newly established company, Oki Semiconductor Co., Ltd.,the Company transferred 95% of the issued shares of the newly established company to
ROHM Co., Ltd. after the Company caused the newly established company to succeed tothe shares of Wipro Techno Centre (Singapore) Pte. Ltd. held by the Company.

3.

Matters concerning account settlement dates of consolidated subsidiaries
The account settlement date of the following consolidated subsidiaries is December 31 eachyear and different from the account settlement date of the consolidated statements. In
preparing consolidated financial statements, the financial statements of these subsidiaries asof their account settlement date are used:
Oki Banking Systems (Shenzhen) Co., Ltd.; Oki Electric Industry (Shenzhen) Co., Ltd.; Oki
Telecommunications Technology (Changzhou) Co., Ltd.; Oki Software Technology Co., Ltd.;Oki Electric Technology (Kunshan) Co., Ltd.; Oki Data Dalian Co., Ltd.; Oki Trading(Beijing) Co., Ltd.
Changzhou Oki-GEG Telecoms Ltd. changed its corporate name to Oki Telecommunications
Technology (Changzhou) Co., Ltd.

4.

Accounting standards(1) Valuation standards and methods for significant assets- 25 -

(Translation)(i) Negotiable securities
The Company and its domestic consolidated subsidiaries value securities inaccordance with how they are held as indicated below. Overseas consolidated
subsidiaries apply the lower of cost or market value.
Other negotiable securities:
Marketable securities:
Stated at fair value based on the market price at the end of the
fiscal year
(Any difference between book value and market value is included
in net assets; sales costs are calculated by the moving averagemethod).
Non-marketable securities:
Stated at cost based on the moving average method(ii) Inventories
The Company and its domestic consolidated subsidiaries evaluate inventories asfollows, and overseas consolidated subsidiaries primarily apply the lower of cost or
market value.
Finished goods:
Principally stated at cost based on the moving average method.
(Balance sheet values are measured by the method of devaluing
the book price to reflect declines in profitability.)Work in progress:
Principally stated at cost based on the specific identification
method. (Balance sheet values are measured by the method ofdevaluing the book price to reflect declines in profitability.)
Materials and supplies:
Principally stated at cost based on the last purchase price method.
(Balance sheet values are measured by the method of devaluing
the book price to reflect declines in profitability.)(Change in method of accounting)
Effective the year ended March 31, 2009, the Company adopted the “AccountingStandards for Measurement of Inventories” (Corporate Accounting Standards No. 9;
July 5, 2006).
Moreover, considering these Accounting Standards were applied to the valuation of
inventory at the beginning of the period, the change in valuation of inventories at the
beginning of the period of ¥9,055 million was recorded as “loss on devaluation of
inventories”, which was included in extraordinary loss.
Consequently, operating income decreased by ¥3,670 million, ordinary loss
increased by ¥3,670 million and net loss before taxes increased by ¥12,726 million.
(iii) Derivatives
Stated at market value(2) Depreciation and amortization- 26 -

(Translation)(i) Property, plant and equipment (excluding lease assets)
The Company and its domestic consolidated subsidiaries primarily apply the
declining-balance method; overseas consolidated subsidiaries primarily apply thestraight-line method.
(Additional information: Change of expected lifetime of tangible fixed assets)
The Company and some domestic consolidated subsidiaries revised (in most cases
shortened) the expected economic lifetime of a part of the machinery upon revision of
the Corporation Tax Act.
The effect of this on profit and loss is insignificant.
(ii) Intangible assets (excluding lease assets)
The Company and its domestic consolidated subsidiaries apply the straight-line
method.
For software sold in the market, depreciation is based on the estimated amounts ofsales in the estimated number of years for sales (three years). For software forinternal use, the straight-line method, based on the estimated durable years (five years),
is used.
Overseas consolidated subsidiaries primarily apply the straight-line method.
(iii) Lease assets
Lease assets relating to finance lease transactions that do not transfer ownershipare depreciated over the lease contract’s lifetime by the straight-line method, assuming
the residual value is zero.
In addition, out of the finance lease transactions that do not transfer ownership,lease transactions whose lease transaction commencement date was on or prior to
March 31, 2008 are accounted for on a basis similar to ordinary rental transactions.
(3) Basis for provision of reserves(i) Allowance for doubtful receivables
To prepare for any losses of accounts receivable and loans, the Company and its
domestic consolidated subsidiaries calculate the amount of potential loss by using thehistorical loss ratio for non-classified loans/receivables and individual assessment forclassified loans/receivables. Overseas consolidated subsidiaries calculate the amountof potential losses by individually assessing the possibility of collection for specificloans/receivables.
(ii) Retirement benefits
To prepare for payment of retirement benefits to employees, the Company and its
consolidated subsidiaries register the amount recognized to accrue at the end of the
fiscal year based on estimated values of retirement benefit obligations and pension
assets.
Differences caused by changes in accounting standards are amortized over 15
years except for consolidated subsidiaries that amortize the difference in the first yearof application and some overseas consolidated subsidiaries that directly deduct the- 27 -

(Translation)difference from retained earnings.
Prior service costs are amortized by the straight-line method over a set number ofyears (14 years) within the average remaining years of service of employees.
Actuarial gains and losses are amortized by the straight line method over a set
number of years (13 to 14 years) within the average remaining years of service of
employees at the time of their accrual in each fiscal year. Amortization of such gains
and losses is deemed to be effective from the year after the one in which they arise.
(iii) Provision for Directors’ retirement
Some domestic consolidated subsidiaries register the necessary amount at the endof the year in accordance with internal rules to prepare for the payment of Directors’
retirement allowance.
(4) Important hedge accounting methods(i) Method of hedge accounting
Deferred hedging is applied. Allocation treatment is applied for forward
exchange contracts eligible for allocation treatment. Special treatment is applied tointerest rate swaps that meet requirements for special treatment.
(ii) Means of hedging and targets of hedging
Forward exchange contracts are used to hedge fluctuations of exchange rates on
credits and debts in foreign currencies. Interest rate swaps are employed to hedge
fluctuations of market interest rates on variable-rate short-term borrowings and longterm borrowings.
(iii) Policies on hedging
Derivative transactions are used to hedge fluctuations of market rates on credits
and debts.
(iv) Assessment method of the effectiveness of hedges
To determine the effectiveness of hedges, the Company compares the cumulative
total of market fluctuations or cash flow fluctuations for the targets of hedging and thatof the market fluctuations or the cash flow fluctuations for the means of hedging,
during the period from the start of hedging to the assessment. The Company thenmakes a decision based on the changes of the two.
(5) Other important matters in preparation of consolidated financial statements(i) Accounting processing of consumption tax
The tax-exclusion method is used for accounting of consumption tax and local
consumption tax.
(ii) Application of consolidated tax payment
The consolidated tax payment is applied.
5.

Valuation of assets and liabilities of consolidated subsidiaries
Assets and liabilities of consolidated subsidiaries are evaluated using the fair market value.

6.

Amortization of goodwill and negative goodwill
Goodwill is evenly amortized over its useful life (mainly five years).

- 28 -

(Translation)

Changes in Principles for Preparing Consolidated Financial Statements
1. Practical solution on unification of accounting policies applied to foreign subsidiaries forconsolidated financial statements
The Company has applied the “Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated Financial Statements” (Practical Solution on
Unification of Accounting Policies No. 18; May 17, 2006) and made amendments necessary forconsolidated settlements of account.
The effect of this on profit and loss is insignificant.
2.

Accounting standard for lease transactions
Finance lease transactions that do not transfer ownership by the Company or its domestic
consolidated subsidiaries were accounted for on a basis similar to rental transactions, but they havebeen accounted for on a basis similar to ordinary sales transactions as we adopted the “AccountingStandard for Lease Transactions” (Accounting Standards Board of Japan Statement No. 13; June
17, 1993 (the Business Accounting Council of Japan First Division); revised on March 30, 2007)
and “Guidance on Accounting Standard for Lease Transactions” (Accounting Standards Board ofJapan Guidance No. 16; January 18, 1994 (The Japanese Institute of Certified Public Accountants,
Accounting System Committee); revised on March 30, 2007).
The effect of this on profit or loss is insignificant.

Notes to Consolidated Balance Sheet
1. Assets pledged as collateral
Investment in securities:
Liabilities collateralized by the above assets:
Short-term borrowings:
2. Accumulated depreciation on tangible fixed assets
3. Liabilities for guarantee
Guarantee for borrowings by employees- 29 -¥7,374 million¥6,000 million¥164,360 million¥1,197 million

(Translation)
Notes to Consolidated Statement of Changes in Shareholders’ Equity
1. Type and number of outstanding shares as of the end of the fiscal year
Common stock: 684,256 thousand shares
2. Number of shares to be issued upon exercise of equity warrants
Category

Breakdown of equity warrants

The Company

No. 2 Equity Warrants(issued on July 18, 2003)
No. 3 Equity Warrants(issued on July 20, 2004)
No. 4 Equity Warrants(issued on July 20, 2005)
No. 5 Equity Warrants(issued on July 28, 2006)
No. 6 Equity Warrants(issued on July 28, 2006)

Type of shares to be issued
upon exercise of equity
warrants

Number of shares to beissued upon exercise of
equity warrants (shares)

Common stock

815,000

Common stock

452,000

Common stock

442,000

Common stock

185,000

Common stock

157,000

Notes to Per-share Information
1. Net assets per share:¥75.64
2. Net loss per share:¥65.90Notes to Important Subsequent Events
Early redemption of zero coupon convertible bonds with stock acquisition rights
The Company resolved to make an early redemption of Oki Electric Industry Co., Ltd. 32nd
zero coupon convertible bonds with stock acquisition rights at the meeting of the Board of
Directors held on April 28, 2009.
1.

Purpose of early redemption
The Company decided to redeem early the full amount of the bonds by taking the status offunds and other conditions of the Company into consideration in a comprehensive manner basedon the current trends in share price level.
2.

Type and description of bonds to be redeemed
Oki Electric Industry Co., Ltd. 32nd zero coupon convertible bonds with stock acquisitionrights3.

Amount of early redemption¥103 per face value of ¥100 (Outstanding balance is ¥12 billion).

4.

Method of early redemption
Early redemption of full amount of outstanding balance upon exercise of call options

5.

Date of redemption- 30 -

(Translation)
June 5, 2009
6.

Method of raising funds for redemption
The Company plans to apply cash reserves.

7.

Amount of interest expense expected to decrease due to decrease in number of bonds
As no interest accrues on the bonds, the amount of interest expense is not affected.

Notes to Retirement Benefit
1. General description of retirement benefit plan adopted by the Company
The Company and its domestic consolidated subsidiaries have, as defined benefit plans, anoncontributory defined benefit corporate pension plan and lump-sum retirement payment plans.
Certain overseas consolidated subsidiaries also have defined benefit and defined contribution
pension plans. In addition, the Company has contributed certain securities to a pension trust in
lump-sum retirement payment plans.
Furthermore, eligible employees, upon termination of their employment with the Group,
may receive certain additional payments under the plans.
Further, the Company may pay extra retirement allowance upon retirement of employees or inother cases.
The Company and 31 domestic consolidated subsidiaries joined the OKI Pension Fundwhich was established on January 1, 2005.
2.

Retirement benefit obligation (Unit: millions of yen)
Fiscal 2008
(As of March 31, 2009)(138,307)
61,105(77,202)a. Projected benefit obligationb. Fair value plan assets
c. Funded status (a plus b)d. Transition differences arising from initial adoption of new accounting standard for
retirement benefits
21,591e. Unrecognized actuarial loss
29,938f. Unrecognized prior service cost (reduction of obligation)(8,854)g. Obligation recognized in the consolidated balance sheets(sum of c, d, e and f)(34,526)h. Prepaid pension cost—i. Allowance for retirement benefits (g minus h)(34,526)
Notes:
1.
Certain domestic consolidated subsidiaries have applied a simplified method in calculating the retirement benefit
obligation.
2.
“Plan assets” include the securities to a pension trust of ¥4,490 million.

- 31 -

(Translation)
3.

Retirement benefit expenses (Unit: millions of yen)
Fiscal 2008
(From April 1, 2008 to March
31, 2009)
7,154
3,203
(1,863)
3,992
2,617
(973)
14,130a. Service costb. Interest cost on projected benefit obligationc. Expected return on plan assets
d. Amortization of obligation at transitione. Amortization of actuarial difference
f. Amortization of prior service cost
g. Net periodic pension cost (sum of a, b, c, d, e and f)
Notes:
1.
The Company paid extra retirement allowances of ¥3,213 million in addition to the above net periodic pension
cost and recorded them as “special retirement payments” and “expenses for business structural reform” in theextraordinary loss section.
2.
Retirement benefits expenses of consolidated subsidiaries that use a simplified method are stated in “a. service
cost”.

Notes to Business Combination
Transactions under common control, etc.
1. Establishment of a subsidiary for semiconductor business by way of company split (OkiSemiconductor Co., Ltd.)(1) Name of business subject to company split and details of the business, legal form ofbusiness combination, name of company after combination and general description oftransaction including purpose of transaction(i) Name of business subject to company split and details of the business
Name of business subject to company split: Semiconductor business of the Company
Details of the business: Manufacture and sale of system LSIs, Logic LSIs, Memory
LSIs and devices for high-speed optical communications and foundry service(ii) Legal form of business combination
Incorporation-type company split with separated business transferrable to a new entity
where the Company is a company making a company split and Oki Semiconductor Co.,
Ltd. is a company newly established for company split.
(iii) Name of company after combination
Oki Semiconductor Co., Ltd.
(iv) General description of transaction including purpose of transaction
The Company caused Oki Semiconductor Co., Ltd. which was newly established by
way of company split (shinsetsu bunkatsu) to succeed to the Company’s rights andobligations concerning its semiconductor business (the “Semiconductor Business”) on
October 1, 2008. In addition, the Company transferred 95% of issued shares of Oki
Semiconductor Co., Ltd. to ROHM Co., Ltd. (“ROHM”).
The Company has been promoting drastic management reforms on a company-widebasis to gain competitive edge and heighten its corporate value in an intensifying global
competition. In the course of a series of business reforms, the Company has also been
discussing internally how to expand its semiconductor business. Meanwhile, ROHM

- 32 -

(Translation)
has been looking for opportunities to improve its corporate value by developing into an
integrated device manufacturer (IDM) that makes semiconductors, having a wide rangeof product portfolios with competitive edges.
Based on this background, the two companies agreed on this share transfer. We
can create a synergistic effect to strengthen both sales and profit for ROHM and the
Semiconductor Business by complementing each other, as the overlap between the
products of the Semiconductor Business and the products handled by ROHM isrelatively insignificant.
To be specific, for the products with a competitive edge which are made by taking
advantage of our advanced technologies in the Semiconductor Business such as low
power consumption, high voltage processing, digital/analog mixed processing andsmall-size packaging technologies, we leverage the fabs of the Semiconductor Business
about which we have gained know-how over the years and for relatively new products
including system LSIs and logic LSIs that currently use outside foundries, we utilize
ROHM’s leading-edge production processes. By taking these measures, we think that
we can expect an active synergistic effect to be generated based on the two companies’
strengths. We also think that both companies will be able to enhance their sales skills
by maximizing the sales network, technology and quality support network both in Japanand overseas.
(2) General description of accounting procedure
This transaction was treated as a transaction under common control in accordance withthe “Accounting Standards for Business Combination” (the Business Accounting
Council of Japan; October 31, 2003) and “Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures”(Accounting Standards Board of Japan Guidance No. 10; finally revised on November
15, 2007).
2.

Establishment of a subsidiary for telecommunications business by way of company split (OkiNetworks Co., Ltd.)(1) Name of business subject to company split and details of the business, legal form ofbusiness combination, name of company after combination and general description oftransaction including purpose of transaction(i) Name of business subject to company split and details of the business
Name of business subject to company split: Telecommunications business of theCompany
Details of the business: Marketing in the field of telecommunications business andplanning, development, and sale of products (product, SI/service)(ii) Legal form of business combination
Incorporation-type company split where the Company is a company making a company
split and Oki Networks Co., Ltd. is a company newly established for company split(iii) Name of company after combination
Oki Networks Co., Ltd.
(iv) General description of transaction including purpose of transaction
The Company resolved at the meeting of the Board of Directors held on August 28,- 33 -

(Translation)2008 the incorporation-type company split plan in which the Company causes Oki
Networks Co., Ltd. which is newly established by way of company split to succeed to
the Company’s rights and obligations concerning its telecommunications business
effective October 1, 2008 and established a subsidiary for the telecommunications
business on October 10, 2008.
OKI has been offering telecom products to Japan’s major telecom carriers and to theenterprise network market. However, in recent years, the business environment has
been changing rapidly. As networks migrate to IP and the use of NGN-based
ubiquitous networks accelerates, the market has been changing rapidly and globally andthe competitive environment is getting fiercer.
In order to become a winner in this competitive network market and further expand
our telecom business, we understand that it is essential to further increase flexibility inmanagement and establish a business structure that can respond to the changing market
in a more agile and timely manner. In addition, to expand into new markets, we
believe it is important to strengthen our marketing skills and at an early stage, establish
a market-driven business model that is flexible and responsive to the market changes.
Thus, we decided to spin off its telecom division, excluding the legacy-type business, tomake it independent of the Company as of October 1, 2008 and establish Oki Networks
Co., Ltd.
Oki Networks aims to offer advanced services seamlessly connecting telecom
networks with enterprise networks based on NGN. OKI will continue to expand its
telecom business by creating new products with an eye on the global market. This will
be done by leveraging its strengths in highly reliable network technology, network
integration technology, offering a full service from IP network technology, design
through to maintenance, and eSound®, eVideo™ etc. to enable high quality voice andvideo over IP.
(2) General description of accounting procedure
This transaction was treated as a transaction under common control in accordance withthe “Accounting Standards for Business Combination” (the Business Accounting
Council of Japan; October 31, 2003) and “Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures”(Accounting Standards Board of Japan Guidance No. 10; finally revised on November
15, 2007).

- 34 -

(Translation)

Transcript of Account Auditors’ Report on Consolidated Financial Statements

Independent Auditors’ Report
May 15, 2009
To: Board of Directors
Oki Electric Industry Co., Ltd.
Ernst & Young ShinNihon LLC
Masato Tsukahara (seal),
Engagement Partner, Certified Public Accountant
Akira Sato (seal),
Engagement Partner, Certified Public Accountant
Yukiyasu Yamakawa (seal),
Engagement Partner, Certified Public Accountant

We have audited the consolidated financial statements – the consolidated balance sheets, theconsolidated statement of operations, the consolidated statement of changes in shareholders equity andnotes to the consolidated financial statements – of Oki Electric Industry Co., Ltd. for the 85th term from
April 1, 2008 to March 31, 2009 in accordance with Article 444 Paragraph 4 of the Company Law.
Oki Electric Industry’s management is responsible for preparing these consolidated financial
statements, and our responsibility is to express our independent opinion regarding these consolidated
financial statements.
We conducted our audit in accordance with auditing standards generally accepted in Japan. These
auditing standards require that we obtain reasonable assurance as to whether the consolidated financial
statements are free of material misstatement. Audits are conducted based on a test basis, and include
reviews of accounting policies and methods that management adopts, and evaluation of management
estimates and the presentation of the consolidated financial statements as a whole. We believe wehave obtained reasonable bases for the expression of our opinion as a result of our audit.
We concluded that the consolidated financial statements fairly present in all aspects Oki ElectricIndustry’s and its subsidiaries’ assets and income or loss in accordance with corporate accounting
standards generally accepted in Japan.
Additional information
1. As mentioned in the “Principles for Preparing Consolidated Financial Statements”, effective theyear ended March 31, 2009, the Company adopted the “Accounting Standards for Measurement of
Inventories”.
2. As mentioned in the “Notes to Important Subsequent Events”, the Company resolved at themeeting of the Board of Directors held on April 28, 2009 to make an early redemption of the 32nd
zero coupon convertible bonds with stock acquisition rights.
No conflict of interest as defined by the Accounting Law exists between Oki Electric Industry, our firm(Ernst & Young ShinNihon LLC) and the respective engagement partners.

- 35 -

(Translation)

Non-Consolidated Balance Sheet(as of March 31, 2009)(Unit: millions of yen)Account title(Assets)

AmountCurrent assets
Cash and deposits
Notes receivable
Accounts receivable, trade
Lease investment assets
Marketable securities
Finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Short-term loan
Advanced paid
Accounts receivable, others
Deferred tax assets
Other current assets
Allowance for doubtful receivables
Total current assets
Fixed assets
Property, plant and equipment
Buildings
Accumulated depreciation
Structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Vehicle and delivery equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Facility rights
SoftwareTotal intangible assets
Investments and other assets
Investments in securities
Shares of affiliated companies
Contribution
Contribution to affiliated companies

Long-term loans to employees
Long-term loans to affiliated companies

Long-term prepaid expenses
Claims provable in bankruptcy,
rehabilitation and other
Lease and guarantee deposits
Other investments and other assets
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

35,020826
49,945
130
1,000
8,380
19,7857,450
229
19,680
4,020
7,609
1,619
122
(94)
155,725

35,160(25,065)
2,574(2,214)
15,957(13,487)
104(97)
38,079(32,627)

10,095
360
2,470
6
5,451
10,442
12
28,839
20
165
5,410
5,596
27,26649,943236
1,673
1
15,786
1,463
220
3,006
825
(5,432)
94,990129,426
285,151- 36 -

Account title(Liabilities)
Current liabilities
Notes payable
Accounts payable, trade
Short-term borrowings
Current portion of long-term borrowings

Lease obligations
Accounts payable, others
Other accrued expenses
Advances
Deposits
Other current liabilities
Total current liabilities
Long-term liabilities
Bonds
Long-term borrowings
Lease obligations
Deferred tax liabilities
Retirement benefits
Other long-term liabilities
Total long-term liabilities
Total liabilities(Net Assets)
Shareholders’ equity
Common stock
Additional paid-in capital
Capital reserve
Other additional paid-in capital
Retained earnings
Other retained earnings
Retained earnings carried forward
Treasury stock
Total shareholders’ equity
Valuation, translation adjustments and others
Net unrealized holding gain on other securities

Amount213
43,076
48,886
19,45620
2,979
10,626
1,278
1,558
347
128,443

12,00066,752
118
157
19,544729
99,302
227,746

76,94046,74425,92820,816(65,220)(65,220)(65,220)(357)
58,107

Total valuation, translation adjustments and others

(430)
(350)
(781)

Equity warrants
Total net assets

79
57,405

Loss on Deferred hedges

Total liabilities and net assets

285,151

(Translation)

Non-Consolidated Statement of Operations(From April 1, 2008 to March 31, 2009)(Unit: millions of yen)Account title

AmountNet sales

271,108

Cost of sales

227,295

Gross profit

43,812

Selling, general and administrative expenses

52,340Operating loss

8,527

Non-operating income
Interest income

637

Interest income on securities

53

Dividend income

1,968

Corporate brand royalty income

1,950

Other

844

5,454

Non-operating expenses
Interest expense

3,125

Other

1,937

Ordinary loss

5,063
8,136

Extraordinary profit
Compensation for transfer

455

455

Extraordinary loss
Loss on sale and disposition of property, plant and equipment
Write-downs of investments in securities

1,752
640

Write-downs of investments in shares of subsidiaries and affiliates

2,671

Provision of allowance for doubtful receivables

5,925

Bad debt written off

1,156

Special retirement payments

1,182

Loss on devaluation of inventories

7,649

Loss on transfer of business and other

3,372

Net loss before taxes

24,35032,031

Income taxes(53)

Income taxes deferred

3,200

Net loss

3,147
35,179- 37 -

(Translation)

Non-consolidated Statement of Changes in Shareholders’ Equity(From April 1, 2008 to March 31, 2009)(Unit: millions of yen)

Shareholders’ equity
Common stock
Balance as of March 31, 2008
Changes during the term under review
Net changes during the term under review
Balance as of March 31, 2009
Additional paid-in capital
Capital reserve
Balance as of March 31, 2008
Changes during the term under review
Net changes during the term under review
Balance as of March 31, 2009
Other additional paid-in capital
Balance as of March 31, 2008
Changes during the term under review
Net changes during the term under review
Balance as of March 31, 2009
Total Additional paid-in capital
Balance as of March 31, 2008
Changes during the term under review
Net changes during the term under review
Balance as of March 31, 2009
Retained earnings
Other retained earnings
Retained earnings carried forward
Balance as of March 31, 2008
Changes during the term under review
Net loss
Net changes during the term under review
Balance as of March 31, 2009
Total retained earnings
Balance as of March 31, 2008
Changes during the term under review
Net loss
Net changes during the term under review
Balance as of March 31, 2009
Treasury stock
Balance as of March 31, 2008
Changes during the term under review
Purchases of treasury stock
Net changes during the term under review

76,94076,94025,92825,92820,816
20,816
46,744
46,744(30,041)(35,179)(35,179)(65,220)(30,041)(35,179)(35,179)(65,220)
(339)
(17)
(17)

Balance as of March 31, 2009(357)

- 38 -

(Translation)

Total shareholders’ equity
Balance as of March 31, 2008
Changes during the term under review
Net loss
Purchases of treasury stock
Net changes during the term under review
Balance as of March 31, 2009
Valuation, translation adjustments and others
Net unrealized holding gain on other securities
Balance as of March 31, 2008
Changes during the term under review

93,304(35,179)(17)(35,196)
58,107

589(Net) changes other than shareholders’ equity during the term under review

Net changes during the term under review
Balance as of March 31, 2009
Loss on Deferred hedges
Balance as of March 31, 2008
Changes during the term under review(1,020)(1,020)
(430)
(271)

(Net) changes other than shareholders’ equity during the term under review

Net changes during the term under review
Balance as of March 31, 2009
Valuation, translation adjustments and others
Balance as of March 31, 2008
Changes during the term under review

(79)
(79)
(350)
318

(Net) changes other than shareholders’ equity during the term under review

Net changes during the term under review
Balance as of March 31, 2009
Equity warrants
Balance as of March 31, 2008
Changes during the term under review
Net changes during the term under review
Balance as of March 31, 2009
Total net assets
Balance as of March 31, 2008
Changes during the term under review
Net loss
Purchases of treasury stock(1,099)(1,099)(781)
79
79
93,702(Net) changes other than shareholders’ equity during the term under review

Net changes during the term under review
Balance as of March 31, 2009

- 39 -(35,179)(17)(1,099)(36,296)
57,405

(Translation)

Note to Non-consolidated Financial Statements
Significant Accounting Policies
1.

Standards and valuation methods for negotiable securities, etc.
Shares of subsidiaries and affiliated companies:
Stated at cost based on the moving average method
Other negotiable securities:
Marketable securities:
Stated at fair value based on the market price at the end of the fiscal year
(The difference between book value and market value is included in net assets.
The sale cost is calculated by using the moving average method).
Non-marketable securities: Stated at cost based on the moving average method

2.

Standards and valuation methods for derivatives, etc.
Derivatives: Stated at market value

3.

Standards and valuation methods for inventories
Finished goods:
Stated at cost based on the moving average method (Balance sheet
values are measured by the method of devaluing the book price toreflect declines in profitability.)Work in process:Stated at cost based on the specific identification method (Balance
sheet values are measured by the method of devaluing the book priceto reflect declines in profitability.)
Materials and supplies: Stated at cost based on the last purchase price method (Balance sheet
values are measured by the method of devaluing the book price toreflect declines in profitability.)(Change in method of accounting)
Effective the year ended March 31, 2009, the Company adopted the “AccountingStandards for Measurement of Inventories” (Corporate Accounting Standards No. 9; July 5,2006).
Moreover, considering these Accounting Standards were applied to the valuation of
inventory at the beginning of the period, the change in valuation of inventories at the
beginning of the period of ¥6,095 million was recorded as “loss on devaluation of
inventories”, which was included in extraordinary loss.
Consequently, operating loss and ordinary loss increased by ¥2,683 million and net loss
before taxes increased by ¥8,778 million.

4.

Depreciation and amortization
Property, plant and equipment (excluding lease assets): declining-balance method
The straight-line method is applied to buildings, excluding annexed structures,acquired on or after April 1, 1998.

- 40 -

(Translation)(Additional information)
Change of expected lifetime of tangible fixed assets
The Company revised (in most cases shortened) the expected economic lifetime of a part ofthe machinery upon revision of the Corporation Tax Act.
The effect of this on profit and loss is insignificant.
Intangible assets (excluding lease assets)
Software for sale in the market:
Amortization method based on the estimated amounts of sales in the estimatednumber of years for sales (3 years)
Software for internal use:
Straight-line method based on the estimated durable years (5 years)
Others:Straight-line method
Lease assets(Lease assets relating to finance lease transactions without transfer of ownership):
They are depreciated over the lease contract’s lifetime by the straight-line
method, assuming the residual value is zero.
In addition, out of the finance lease transactions that do not transfer
ownership, lease transactions whose lease transaction commencement date wason or prior to March 31, 2008 are accounted for on a basis similar to ordinary
rental transactions.
5.

Basis for provision of reserves
Allowance for doubtful receivables
To prepare for any losses on accounts receivable and loans, the Company calculates theamount of potential loss by using the historical loss ratio in the case of non-classified
loans/receivables and by individual assessment in the case of classified loans/receivables.
Retirement benefits
To prepare for payment of retirement benefits to employees, the Company records theamount recognized to accrue at the end of the fiscal year based on the estimated values ofretirement benefit obligations and pension assets.
Differences for changes in accounting standards are amortized over 15 years.
Prior service cost is amortized by the straight-line method over a certain number of years(14 years) within the average remaining years of service of employees.
The actuarial difference is amortized proportionately using the straight-line method overa certain number of years (13 to 14 years) within the average remaining service period of theemployees from the fiscal year after the difference is incurred.

6.

Hedge accounting methods(1) Method of hedge accounting
Deferred hedging is applied. As for forward exchange contracts eligible for allocation
treatment, allocation treatment is applied. With regard to interest rate swaps that meetthe requirements for special treatment, special treatment is applied.
(2) Means of hedging and targets of hedging- 41 -

(Translation)
Forward exchange contracts are used to hedge fluctuations of exchange rates on credits
and debts in foreign currencies. Interest rate swaps are employed to hedge fluctuationsof interest rates in the markets on variable-rate short-term borrowings and long-termborrowings.
(3) Policies on hedging
Derivative transactions are used to hedge fluctuations of market rates on credits anddebts.
(4) Assessment method of the effectiveness of hedges
To determine the effectiveness of hedges, the Company compares the cumulative total ofthe market fluctuations or the cash flow fluctuations for the targets of hedging and that of
the market fluctuations or the cash flow fluctuations for the means of hedging, during theperiod from the start of hedging to the assessment. The Company then makes adecision based on the changes of the two.
7.

Other important matters in preparation of non-consolidated financial statements(1) Accounting processing of consumption tax
The tax-exclusion approach is applied for accounting of consumption tax and local
consumption tax.
(2) Application of consolidated tax payments
Consolidated tax payments are applied.

Changes in accounting policies
Accounting Standard for Lease Transactions
Finance lease transactions that to do not transfer ownership were accounted for on a basis similar
to rental transactions, but they have been accounted for on a basis similar to ordinary sales
transactions as we adopted the “Accounting Standard for Lease Transactions” (AccountingStandards Board of Japan Statement No. 13; June 17, 1993 (the Business Accounting Council ofJapan First Division); revised on March 30, 2007) and “Guidance on Accounting Standard forLease Transactions” (Corporate Accounting Standards Board of Japan Guidance No. 16; January
18, 1994 (The Japanese Institute of Certified Public Accountants, Accounting System Committee);revised on March 30, 2007).
The effect of this on profit and loss is insignificant.
Notes to Non-consolidated Balance Sheets
1. Assets pledged as collateral
Investment in securities:¥7,374 million
Liabilities collateralized by the above assets:
Short-term borrowings:¥6,000 million
2. Guarantee liabilities:
The Company provides guarantees for bank borrowings made by employees andaffiliated companies as shown below.
Oki Electric Industry (Shenzhen) Co., Ltd.

- 42 -¥1,386 million(96,431 thousand yuan)

(Translation)
Employees (housing loans)
Oki Data Americas, Inc.

¥1,002 million¥501 million(US$5,100 thousand)¥400 million¥317 million¥49 million¥3,657 million

Nagano Oki Electric Co., Ltd.
Oki Engineering Co., Ltd.
Three other entities:
Total:
3.

Monetary claims receivable from and payable to affiliates
Short-term monetary claims receivable from affiliated companies:
Long-term monetary claims receivable from affiliated companies:
Short-term monetary claims payable to affiliated companies:
Long-term monetary claims payable to affiliated companies:

Notes to Non-consolidated Statement of Operations
Transactions with affiliated companies
Sales:
Purchases:
Non-operating transactions:¥34,062 million¥16,980 million¥30,346 million¥16 million¥40,052 million¥102,360 million¥5,959 million

Notes to Non-consolidated Statement of Changes in Shareholders’ Equity
Type and number of treasury stock as of the end of the fiscal year under review
Common stock:
1,295 thousand shares- 43 -

(Translation)
Notes to Deferred Tax Accounting
Major factors giving rise to deferred tax assets and liabilities
Deferred tax assets
Loss carryforwards
Nondeductible retirement benefits
Nondeductible doubtful accounts
Nondeductible write-downs of inventories
Nondeductible loss on evaluation of affiliates’ stocks
Nondeductible loss on impairment of fixed assets
Nondeductible loss on evaluation of investment securities
Nondeductible accrued bonuses
OthersSubtotal deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Nondeductible unrealized gain on contribution of securities to thepension trust
OthersTotal deferred tax liabilities
Net deferred tax liabilities¥24,668 million¥10,620 million¥2,190 million¥2,003 million¥1,543 million¥1,181 million¥802 million¥690 million¥1,715 million¥45,417 million¥(42,328) million¥3,088 million¥(1,567) million¥(59) million¥(1,626) million¥1,461 million

Notes to Leased Fixed Assets
Finance lease transactions that do not transfer ownership whose lease transaction commencement
date was on or prior to March 31, 2008 are accounted for on a basis similar to ordinary rental
transactions.
1.
2.
3.

Amount equivalent to acquisition cost of leased assets as of the end of the term under review¥802 million
Amount equivalent to accumulated depreciation of leased assets as of the end of the term
under review¥331 million
Amount equivalent to unexpired lease payment of leased assets as of the end of the term
under review¥484 million- 44 -

(Translation)
Notes to Related Party Transactions
Subsidiaries, etc.
Attribute

Subsidiary

Subsidiary

Company
nameOki
SoftwareCo., Ltd.

Oki
Networks
Co., Ltd.

Location

Warabi,
SaitamaPref.

Minatoku, Tokyo

Capital¥400
million¥490
millionOki
Customer
Adtech Co.,Ltd.

Koto-ku,Tokyo

Subsidiary

Oki Printed
CircuitsCo., Ltd.

Joetsu,NiigataPref.

¥480
millionSubsidiaryOki
Developme
-nt
Co.,
Ltd.

Shinagaw
a-ku,
Tokyo

¥180
millionSubsidiary

Oki
Telecommu-nication
SystemsCo., Ltd.

Warabi,
SaitamaPref.

¥200
millionSubsidiaryOki
Communica-tion
SystemsCo., Ltd.

Tokorozawa,
SaitamaPref.

SubsidiaryOki
Network
Integration
Co., Ltd.

Koto-ku,Tokyo

Subsidiary

Nagano Oki
Electric
Co., Ltd.

Subsidiary

Subsidiary

Subsidiary¥2,050
millionBusiness

Production and sales ofsoftwareMarketing in the fieldof telecommunications
business and planning,development, and saleof products

Maintenance,
construction,
monitoring, operation,
manufacture and sale ofequipment and systems
Development, design,
manufacture and sale ofhigh-density multilayer printed circuitboardsOwnership, sale,purchase, lease andbrokerage of real estate,contract for
construction work,
design, construction
management andbuilding management

Votingright
ratio

Relationship withrelated party(Direct)100%

Production of software
on a contract basis,
etc.
lending of funds,
concurrent assumptionof office of officer(Direct)
100%(Direct)
100%

Purchase of products
and services, lendingof funds, concurrent
assumption of office ofofficer

Purchase of services,lending of funds,
concurrent assumptionof office of officer

Descriptio
n oftransactionsEndingbalance(mil.
yen)

Transaction
amount(mil. yen)Account
item

16,627

Accounts
payable –trade
Accruedexpenses

11,950

Short-term
loans

3,450

8,921

Accounts
payable –
trade

6,869

Substitutional purchase,etc.

-

Advances

3,283

Lending of
funds

5,750

Shortterm
loans

3,700

Underwriti
ng of
capitalincrease

1,343

-

-

Lending offunds

84,550

Shortterm
loans

2,380

Purchaseof services

Lending offunds
Purchaseofproducts
andservices

5,571
361

(Direct)
100%

Purchase of products
and services, lendingof funds, concurrent
assumption of office ofofficer

Lending of
funds

5,958

Shortterm
loans

2,601

(Direct)
100%

Lease and brokerageof real estate, lendingof funds, concurrent
assumption of office ofofficer

Lending of
funds

3,640

Shortterm
loans

1,760

Development andmanufacture of
telecommunications
software(Direct)100%

Production of software
on a contract basis,
etc. Lending of funds

Lending of
funds

3,270

Shortterm
loans

1,110

¥300
millionDesign, manufacture,development and saleof electronic,
information andtelecommunications
device and related parts(Direct)
100%

Purchase of products
and services, lendingof funds

Lending of
funds

7,300

¥100
millionNetwork integration
service business(Direct)
80%(Indirect) 20%

Purchase of products
and services, lendingof funds, concurrent
assumption of office ofofficer

Lending of
funds

4,630

Affiliate
long-term
loans

720

Komoro,NaganoPref.

¥400
million

Manufacture,inspection and repair of
substrates and devices(Direct)
100%

Purchase of products
and services, lendingof funds, concurrent
assumption of office ofofficer

Lending of
funds

4,130

Affiliate
long-term
loans

2,050

Oki Power
Tech Co.,
Ltd.

Fukushima,
Fukushima Pref.

¥100
million(Direct)
100%

Purchase of products
and services, lendingof funds

Lending of
funds

3,600

Affiliate
long-term
loans

3,600

Oki Sensor
DeviceCorporation

Hachioji,
Tokyo

¥200
million(Direct)
100%

Lending of funds,
concurrent assumptionof office of officer

Lending of
funds

3,495

Affiliate
long-term
loans

1,265

Development, design,
manufacture and sale ofpower supply units forelectric devices
Development, design,
manufacture and sale ofelectric parts- 45 -

Affiliate
long-term
loans

3,180

(Translation)

Business

Votingright
ratio

Relationship withrelated party

Descriptio
n oftransactionsTransaction
amount(mil. yen)Account
item

Endingbalance
(mil.
yen)

¥200
million

Production and sales ofsemiconductor products-

Processing of theCompany’s products
on a contract basis
Lending of funds

Lending offunds

13,250--¥200
million

Production and sales ofsemiconductors-

Processing of products
on a contract basis,
Lending of funds

Lending offunds

13,032--

Sales of printers(Direct)
100%

Purchase of products,
concurrent assumptionof office of officer

considerati
on for useof thecorporate
brand

1,185

-

-

Attribute

Company
nameLocation

CapitalSubsidiary

Miyagi Oki
Electric
Co., Ltd.

Ohiramura,
Kurokaw
a-gun,
Miyagi
Pref.

Subsidiary

MiyazakiOki ElectricCo., Ltd.

Kiyotakecho,
Miyazakigun,
MiyazakiPref.

Subsidiary

Oki Data
Corporation

Minatoku, Tokyo¥17,000

millionNotes:
1. The transactions amount excludes consumption tax, while the ending balance includes consumption tax.
2. Conditions of transactions and policy in determining conditions(1) The Company determines conditions regarding purchase of services and products based on market prices.
(2) The Company determines the interest rate for the lending of funds by taking the market rate of interest into
consideration.
(3) The Company determines the amount of consideration for the corporate brand royalty by reference to a
general model.
3. Underwriting of capital increase: The Company underwrote a capital increase carried out by Oki Customer Adtech
Co., Ltd. and the acquisition cost (transaction amount) is calculated based on the amount equivalent to theshareholders’ equity for the most recent settlement period of the company. With respect to such transaction, theCompany recorded a difference between the amount of claim which has ceased to exist and acquisition cost of¥1,156 million as bad debt written-off.
4. For the loans to eight subsidiaries, the Company recorded a loan loss reserve of ¥4,728 million in total. The
Company also recorded a provision for loan loss reserve of ¥5,715 million in the business year under review. Of
such amount, ¥2,826 million is for the subsidiaries which were succeeded to by a newly established company when
the Company spun off its semiconductor business and transferred the business to a newly established company, Oki
Semiconductor Co., Ltd. on October 1, 2008 and there is no provision for loan loss reserve at the end of the businessyear under review.

Notes to Per-share Information
1. Net assets per share: ¥83.94
2. Net loss per share: ¥51.50

Notes to Significant Subsequent Events
Early redemption of zero coupon convertible bonds with stock acquisition rights
The Company resolved to make an early redemption of Oki Electric Industry Co., Ltd. 32nd zero
coupon convertible bonds with stock acquisition rights at the meeting of the Board of Directors
held on April 28, 2009.
1.

Purpose of early redemption
The Company decided to redeem early a full amount of the bonds by taking the status offunds and other conditions of the Company into consideration on a comprehensive manner based- 46 -

(Translation)on the current trends in share price level.
2.

Type and description of bonds to be redeemed
Oki Electric Industry Co., Ltd. 32nd zero coupon convertible bonds with stock acquisitionrights3.

Amount of early redemption¥103 per face value of ¥100 (Outstanding balance is ¥12 billion.)

4. Method of early redemption
Early redemption of full amount of outstanding balance upon exercise of call options
5.

Date of redemption
June 5, 2009

6.

Method of raising funds for redemption
The Company plans to apply cash reserves.

7.

Amount of interest expense expected to decrease due to decrease in number of bonds
As no interest accrues on the bonds, the amount of interest expense is not affected.

Notes to Business Combination
Transactions under common control, etc.
1. Establishment of a subsidiary for semiconductor business by way of company split (OkiSemiconductor Co., Ltd.)(1) Name of business subject to company split and details of the business, legal form ofbusiness combination, name of company after combination and general description oftransaction including purpose of transaction(i)Name of business subject to company split and details of the business
Name of business subject to company split: Semiconductor business of theCompany
Details of the business: Manufacture and sale of system LSIs, Logic LSIs,
Memory LSIs and devices for high-speed optical communications and foundry
service(ii) Legal form of business combination
Incorporation-type company split with separated business transferrable to a newentity where the Company is a company making a company split and Oki
Semiconductor Co., Ltd. is a company newly established for company split.
(iii) Name of company after combination
Oki Semiconductor Co., Ltd.
(iv) General description of transaction including purpose of transaction
The Company caused Oki Semiconductor Co., Ltd. which was newly establishedby way of company split to succeed to the Company’s rights and obligations- 47 -

(Translation)
concerning its semiconductor business (the “Semiconductor Business”) on
October 1, 2008. In addition, the Company transferred 95% of issued shares of
Oki Semiconductor Co., Ltd. to ROHM Co., Ltd. (“ROHM”).
The Company has been promoting drastic management reforms on a companywide basis to gain competitive edge and heighten its corporate value in an
intensifying global competition. In the course of a series of business reforms, theCompany has also been discussing internally how to expand its semiconductorbusiness. Meanwhile, ROHM has been looking for opportunities to improve its
corporate value by developing into an integrated device manufacturer (IDM) thatmakes semiconductors, having a wide range of product portfolios with competitiveedges.
Based on this background, the two companies agreed on this share transfer.
We can create a synergistic effect to strengthen both sales and profit for ROHM
and the Semiconductor Business by complementing each other, as the overlap
between the products of the Semiconductor Business and the products handled by
ROHM is relatively insignificant.
To be specific, for the products with competitive edge which are made bytaking advantage of our advanced technologies in the Semiconductor Businesssuch as low power consumption, high voltage processing, digital/analog mixed
processing and small-size packaging technologies, we leverage the fabs of the
Semiconductor Business about which we have gained know-how over the years
and for relatively new products including system LSIs and logic LSIs thatcurrently use outside foundries, we utilize ROHM's leading-edge production
processes. By taking these measures, we think that we can expect an activesynergistic effect to be generated based on the two companies’ strengths. We
also think that both companies will be able to enhance their sales skills by
maximizing the sales network, technology and quality support network both inJapan and overseas.
(2) General description of accounting procedure
This transaction was treated as a transaction under common control in accordance withthe “Accounting Standards for Business Combination” (the Business Accounting Councilof Japan; October 31, 2003) and “Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures” (AccountingStandards Board of Japan Guidance No. 10; finally revised on November 15, 2007).
2.

Establishment of a subsidiary for telecommunications business by way of company split (OkiNetworks Co., Ltd.)(1) Name of business subject to company split and details of the business, legal form ofbusiness combination, name of company after combination and general description oftransaction including purpose of transaction(i)Name of business subject to company split and details of the business
Name of business subject to company split: Telecommunications business of theCompany- 48 -

(Translation)

(ii)

(iii)
(iv)

Details of the business: Marketing in the field of telecommunications business andplanning, development, and sale of products (product, SI/service)
Legal form of business combination
Incorporation-type company split where the Company is a company making acompany split and Oki Networks Co., Ltd. is a company newly established forcompany split
Name of company after combination
Oki Networks Co., Ltd.
General description of transaction including purpose of transaction
The Company resolved at the meeting of the Board of Directors held on August 28,
2008 the incorporation-type company split plan in which the Company causes
Oki Networks Co., Ltd. which is newly established by way of company split tosucceed to the Company’s rights and obligations concerning its
telecommunications business effective October 1, 2008 and established asubsidiary for the telecommunications business on October 10, 2008.
OKI has been offering telecom products to Japan’s major telecom carriers andto the enterprise network market. However, in recent years, the businessenvironment has been changing rapidly. As networks migrate to IP and the useof NGN-based ubiquitous networks accelerates, the market has been changing
rapidly and globally and competitive environment is getting fiercer.
In order to become a winner in this competitive network market and further
expand our telecom business, we understand that it is essential to further increase
flexibility in management and establish a business structure that can respond to thechanging market in a more agile and timely manner. In addition, to expand into
new markets, we believe it is important to strengthen our marketing skills and at
an early stage, establish a market-driven business model that is flexible andresponsive to the market changes. Thus, we decided to spin off its telecom
division, excluding legacy-type business, to make it independent of the Company
as of October 1, 2008 and establish Oki Networks Co., Ltd.
Oki Networks aims to offer advanced services seamlessly connecting telecom
networks with enterprise networks based on NGN. OKI will continue to expand
its telecom business by creating new products with an eye on the global market.
This will be done by leveraging its strengths in highly reliable network technology,
network integration technology, offering a full service from IP network technology,
design through to maintenance, and eSound®, eVideo™ etc. to enable high quality
voice and video over IP.

(2) General description of accounting procedure
This transaction was treated as a transaction under common control in accordance withthe “Accounting Standards for Business Combination” (the Business Accounting Councilof Japan; October 31, 2003) and “Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures” (AccountingStandards Board of Japan Guidance No. 10; finally revised on November 15, 2007).

- 49 -

(Translation)

Transcript of Account Auditors’ Report

Independent Auditors’ Report
May 15, 2009
To: Board of Directors
Oki Electric Industry Co., Ltd.
Ernst & Young ShinNihon LLC
Masato Tsukahara (seal),
Engagement Partner, Certified Public Accountant
Akira Sato (seal),
Engagement Partner, Certified Public Accountant
Yukiyasu Yamakawa (seal),
Engagement Partner, Certified Public Accountant

We have audited the non-consolidated financial statements – the non-consolidated balance sheets, the nonconsolidated statement of operations, the non-consolidated statement of changes in shareholders’ equity andnotes to non-consolidated financial statements – and its supporting schedules of Oki Electric Industry Co.,
Ltd.’s 85th term from April 1, 2008 to March 31, 2009 in accordance with Article 436 Paragraph 2 Item 1 of
the Company Law. The financial statements and supporting schedules are the responsibility of Oki ElectricIndustry’s management. Our responsibility is to express an opinion on the financial statements andsupporting schedules based on our audit as independent auditors.
We conducted our audit in accordance with auditing standards generally accepted in Japan. These auditing
standards require that we obtain reasonable assurance as to whether these financial statements are free ofmaterial misstatement. Audits are conducted based on a test basis, and include reviews of accounting
policies and methods that management adopts, and evaluation of management estimates and the presentationof financial statements and supporting schedules as a whole. We believe that we have obtained reasonablebases for the expression of our opinion as a result of our audit.

We concluded that the non-consolidated financial statements fairly present in all aspects Oki ElectricIndustry’s assets and income or loss in accordance with corporate accounting standards generally
accepted in Japan.
Additional Information:
1. As mentioned in the “Principles for Preparing Financial Statements”, effective the year ended March
31, 2009, the Company adopted the “Accounting Standards for Measurement of Inventories”.
2. As mentioned in the “Notes to Important Subsequent Events”, the Company resolved at the meeting of
the Board of Directors held on April 28, 2009 to make an early redemption of the 32nd zero coupon
convertible bonds with stock acquisition rights.
No conflict of interest as defined by the Accounting Law exists between Oki Electric Industry Co., Ltd., ourfirm (Ernst & Young ShinNihon LLC) and the respective engagement partners.

- 50 -

(Translation)

Transcript of Corporate Auditors’ Report

Corporate Auditors’ Report
We, the Board of Corporate Auditors, have prepared upon consultation this Audit Report based on reports compiled by each
Corporate Auditor with respect to Directors’ performance of their duties during the 85th fiscal year from April 1, 2008 to
March 31, 2009, as follows:
1. Auditing methods used by Corporate Auditors and the Board of Corporate Auditors, and details of audit
The Board of Corporate Auditors specified an audit policy, compiled audit plans and received reports from each Corporate
Auditor on the status of implementation and results of audits and also received reports from Directors and accounting auditorson the status of the execution of their duties and asked them for explanations as needed.
Each Corporate Auditor, according to the audit standards, policy and plans set up by the Board of Corporate Auditors, has
maintained good communications with Directors, the internal audit division and other employees and strived to collectinformation and improve the audit environment as well as attending meetings of the Board of Directors and other meetings as
deemed important, received from Directors and employees reports on the execution of their duties, asked for explanations asnecessary, perused the documents whereby the important decisions were made, and examined business and financial
conditions at the head office and principal operating offices. In addition, we have monitored and verified the details of theresolution made by the Board of Directors concerning the establishment of systems defined in Article 100, Paragraph 1 andParagraph 3 of the Regulations for Enforcement of the Company Law as necessary for ensuring compliance with laws and theCompany’s Articles of Incorporation in the performance of duties by Directors and for ensuring appropriateness of duties of a
joint stock company. We have also monitored and verified the status of the systems established based on the said resolution(internal control systems). Also, we have maintained good communications and exchanged information with directors,
corporate auditors and others of the subsidiaries of the Company, and received from the subsidiaries reports on their businessconditions as needed. Based on the methods mentioned above, we have reviewed the financial statements for the said fiscal
year and their supplementary schedules.
We have also monitored and verified whether the auditors maintained their independence and properly implemented
audits, received from the auditors reports on the performance of their duties and asked them for explanations as necessary.
The accounting auditors reported to us that “systems for ensuring proper execution of duties” (listed in each item of Article
131 of the Corporate Calculation Regulations) have been established in accordance with the quality control standards
concerning audits (Business Accounting Council, October 28, 2005), and asked them for explanations as necessary. Based on
the methods mentioned above, we have reviewed financial statements for the said fiscal year (balance sheet, statement ofoperations, statement of changes in shareholders’ equity, and notes to non-consolidated financial statements), their
supplementary schedules and consolidated financial statements (consolidated balance sheet, consolidated statement ofoperations, consolidated statement of changes in shareholders’ equity, and notes to consolidated financial statements).
2. Results of Audit(1) Results of audit of the business report
1) We consider that the business report and its supplementary schedules fairly present the situation of the Company
in accordance with relevant laws and regulations and the Company’s Articles of Incorporation.
2) With respect to the Directors’ performance of their duties, we have found neither undue transactions nor material
facts that violate relevant laws and regulations or the Company’s Articles of Incorporation.
3) We consider that the details of the resolution made by the Board of Directors concerning internal control
procedures are proper. With respect to the Directors’ performance of their internal control duties regarding, wehave found no issues to be pointed out.
(2) Results of audit of financial statements and their supplementary schedules
We consider that the auditing methods and results of the Company’s Accounting Auditors, Ernst & Young ShinNihon
LLC, are proper.
(3) Results of audit of consolidated financial statements
We consider that the auditing methods and results of the Company’s Accounting Auditors, Ernst & Young ShinNihon
LLC, are proper.
May 19, 2008
The Board of Corporate Auditors, Oki Electric Industry Co., Ltd.
Takahisa Inagawa, Standing Auditor (seal)
Yoshikatsu Shiraishi, Standing Auditor (seal)
Noriyuki Kandori, Outside Standing Auditor (seal)
Seiji Nishi, Outside Auditor (seal)- 51 -

(Translation)

Reference Documents for the General Meeting of Shareholders
Agenda and Reference Matters
Agenda 1: Partial Amendment to the Articles of Incorporation
1. Reason for change(1) The Law for Partial Amendment of the Law Concerning Book-Entry Transfer of Corporate
Bonds, etc. to Streamline Settlement for Transactions of Shares, etc. (Law No. 88 of 2004)
was enforced on January 5, 2009, and shares of listed companies were simultaneouslytransferred to the book-entry transfer system for shares. Following the transfer to the new
system, the amendment to the Articles of Incorporation is deemed to be resolved to abolishthe provision of issuing share certificates in Article 8 of the current Articles of Incorporation.
Concurrently, since the provision of non-issuance of shares less than one unit in Paragraph 2,
Article 9, the provision concerning beneficial shareholders in Article 10 and the provision
concerning the register of beneficial shareholders in Article 11 became unnecessary, we
propose to delete these provisions.
(2) To further clarify the roles and responsibilities of Directors who make decisions and supervise
managerial issues, and corporate officers who execute business operations, and to enhancetheir functions, we propose to abolish the system for Directors with specific titles, and deletesuch provision for Directors with specific titles from the Articles of Incorporation.
(3) In addition to the amendment above, we propose to revise the number of articles.

2. Details of proposed amendments
Details of the proposed amendments are as follows:(Underlined portions indicate the parts that are to be changed.)
Current Articles of Incorporation
Article 8. (Issuance of Share Certificates)
The Company shall issue share certificates for the shares.

Proposed Amendment(deleted)

Article 9. (Number of Shares Constituting One Unit and
Non-Issuance of Certificates for Less-Than-One-Unit
Shares)1.
The number of shares constituting one unit of sharesof the Company shall be one thousand (1,000)
shares.
2.
Notwithstanding the preceding provision, theCompany shall not issue any certificates for sharesless than one unit, unless otherwise provided for in
the Share Handling Regulations.

Article 8. (Number of Shares Constituting One Unit)

Article 10. (Rights Concerning Less-Than-One-Unit

Article1.

The number of shares constituting one unit of sharesof the Company shall be one thousand (1,000) shares.
(deleted)- 52 -

9.

(Rights

ConcerningLess-Than-One-Unit

(Translation)
Current Articles of Incorporation
Shares)A shareholder (including the beneficial shareholder; thesame applies hereinafter) of the Company shall not
exercise any rights other than those described below withrespect to the shares less than one unit held by it.
i)Right described in each Item of Paragraph 2, Article
189 of the Company Law.
ii) Right to make a request under the provision of
Paragraph 1, Article 166 of the Company Law.
iii) Right to receive allocation of offered shares andallocation of offered stock purchase warrants inaccordance with the number of shares held by theshareholder.

Proposed Amendment
Shares)A shareholder of the Company shall not exercise any
rights other than those described below with respect to theshares less than one unit held by it.
i)
ii)
iii)

Right described in each Item of Paragraph 2, Article
189 of the Company Law.
Right to make a request under the provision of
Paragraph 1, Article 166 of the Company Law.
Right to receive allocation of offered shares andallocation of offered stock purchase warrants inaccordance with the number of shares held by theshareholder.

Article 11. (Administrator of Register of Shareholders)
1.
The Company shall have an administrator of theregister of shareholders.
2.
The administrator of the register of shareholders andits handling office shall be determined by resolutionof the Board of Directors and public notice shall begiven thereof.
3.
The register of shareholders (including the registerof beneficial shareholders; the same applies
hereinafter), the register of stock purchase warrants
and the register of lost share certificates of theCompany shall be prepared and kept, and all otherbusiness pertaining to the register of shareholders,
the register of stock purchase warrants and theregister of lost share certificates shall be handled by
the administrator of the register of shareholders andnot by the Company.

Article 10. (Administrator of Register of Shareholders)
1.
The Company shall have an administrator of theregister of shareholders.
2.
The administrator of the register of shareholders andits handling office shall be determined by resolutionof the Board of Directors and public notice shall begiven thereof.
3.
Preparation and storage of the register ofshareholders and other administrative businesspertaining to the register of stock purchase warrantsof the Company shall be handled by theadministrator of the register of shareholders and notby the Company.

Article 12. (Share Handling Regulations)
The business and the service charges pertaining to theshares of the Company shall be subject to laws,
ordinances or these Articles of Incorporation and theShare Handling Regulations established by the Board of
Directors.

Article 11. (Share Handling Regulations)
The business pertaining to the shares of the Company
shall be subject to laws, ordinances or these Articles ofIncorporation and the Share Handling Regulations
established by the Board of Directors.

Article 13 to 14 (provisions omitted)

Article 12 to 13 (provisions omitted)

Article 15. (Person with the Right to Call the Meeting andChairman)
1.
A meeting of the shareholders shall be called andpresided over by the Director and President.

Article 14. (Person with the Right to Call the Meeting andChairman)
1.
A Director appointed by the Board of Directors
among Representative Directors shall convene ameeting of the shareholders and become chairman.
2.
In case the Director in the preceding paragraph isunable to act, one of the other directors shall calland preside over the meeting of the shareholders inaccordance with the order determined in advance by
resolution of the Board of Directors.

2.

In case the Director and President is unable to act,
one of the other directors shall call and preside overthe meeting of the shareholders in accordance withthe order determined in advance by resolution of theBoard of Directors.

- 53 -

(Translation)
Current Articles of Incorporation

Proposed Amendment

Article 16 to 21 (provisions omitted)

Article 15 to 20 (provisions omitted)

Article 22. (Representative Directors and Directors with
Specific Titles)
Representative Directors shall be elected by1.
resolution of the Board of Directors.
2.
The Board of Directors shall decide one Director
and Chairman, one President and Director, several
Directors and Vice Presidents, several Managing
Directors and several Senior Managing Directors by
its resolution.

Article 21. (Representative Directors)

Article 23. (Person with the Right to Call the Meeting ofBoard of Directors and Chairman)
1.
Unless otherwise provided for in laws andregulations, meeting of the Board of Directors
shall be called and presided over by a Director andChairman.
2.
In case the Director and Chairman is unable to act,
one of the other directors shall call and preside overthe meeting of the Board of Directors in accordancewith the order determined in advance by resolutionof the Board of Directors.

Article 22. (Person with the Right to Call the Meeting ofBoard of Directors and Chairman)
1.
Unless otherwise provided for in laws andregulations, a meeting of the Board of Directors
shall be called and presided over by a Director
previously appointed by the Board of Directors.
2.
In case the Director as in the preceding paragraph isunable to act, one of the other directors shall calland preside over the meeting of the Board of
Directors in accordance with the order determined inadvance by resolution of the Board of Directors.

Article 24 to 36 (provisions omitted)

Article 23 to 35 (provisions omitted)(Newly established)

Representative Directors shall be elected by resolution of
the Board of Directors.
(deleted)

Supplementary Provisions
Article 1
Preparation and storage of the register of the lost1.
share certificates of the Company and otheradministrative business pertaining to the register ofthe lost share certificates of the Company shall behandled by the administrator of the register ofshareholders and not by the Company.
2.

- 54 -

This article shall be valid until January 5, 2010, andbe deleted as of January 6, 2010.

(Translation)

Agenda 2: Election of Two (2) Directors
Keiichi Fukumura, Masayoshi Matsushita and Hironori Kitabayashi resigned as
Directors as of April 1, 2009.
Also, the tenure of both Directors Hideichi Kawasaki and Minoru Morio will expire
at the end of this general meeting of shareholders.
We accordingly request that you elect two Directors from among the following
candidates.
Candidates for Directors (Two):
CandidatenumberName(Date of birth)
Apr. 1970
Nov. 1990

1

Hideichi Kawasaki(January 10, 1947)

2

Minoru Morio(May 20, 1939)

Apr. 2001
Apr. 2004
Jun. 2005
Apr. 2009
Apr. 1963
Apr. 1988
Jun. 1988
Jun. 1990
Jun. 1993
Jun. 1999
Jun. 2000
Jun. 2001

Brief personal profile, position andrepresentation of other companies
Joined Oki Electric
General Manager, No. 3 Sales Div., Financial
System Sales Headquarters
Executive Officer
Managing Executive Officer
Managing Director
Director and Vice President (incumbent)
Joined Sony Corp.
General Manager, Personal Video Headquarters,
Sony Corp.
Director, Sony Corp.
Managing Director, Sony Corp.
Director and Vice President, Sony Corp.
Representative of Technology, Sony Corp.
Director and Vice Chairman, Sony Corp.
Director, Oki Electric (incumbent)

Number of Oki
shares held

31,000 shares

10,000 shares

Notes:
1.
The candidate for Director Minoru Morio is currently the outside Director of the Company, and is in eight years
after assumption thereof at the conclusion of this ordinary general meeting of shareholders.
2.
The reason Mr. Minoru Morio is proposed to be the candidate for outside Director is as follows:
In light of his abundant experience, brilliant character and insight in the electronics industry, we judged that hewould be able to precisely advise on the Company’s management environment and managerial issues, which
would lead to enhance the supervisory function of the Board of Directors against the business execution entity.

- 55 -

(Translation)
Agenda 3: Election of One (1) Corporate Auditor
Corporate Auditor Takahisa Inagawa will retire effective at the end of this general
meeting of shareholders.
We accordingly request that you elect one new Corporate Auditor. Particulars of the
proposed candidate are provided below.
The Board of Auditors has already approved this agenda.
Candidate for Corporate Auditor (1):Name
(Date of birth)

Keiichi Fukumura(April 16, 1947)

Brief personal profile, position andrepresentation of other companies
Joined Oki Electric
Apr. 1970
General Manager, Finance Div.
Jun. 1995
General Manager, Accounting Div.
Jun. 1998
Executive Officer
Apr. 2000
Managing Executive Officer
Apr. 2006
Managing Director
Jun. 2007
Advisor (incumbent)
Apr. 2009

Number of Oki
shares held

29,000 shares(Representation at other companies)
President and CEO, Oki Development
Co., Ltd.
Notes: The candidate Keiichi Fukumura is planned to resign as President and CEO of Oki Development Co., Ltd. on
June 15, 2009.

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(Translation)
Appendix

Instructions for the Exercise of Voting Rights via the Internet

1.

Matters requiring your agreement concerning the exercise of voting rights via the Internet
We kindly request your consent to the following regarding exercise of voting rights via the Internet.
1) Exercise of voting rights via Internet is only possible by accessing the voting site designated by theCompany (please refer to the following URL). It is also possible to access this site with a mobile phone.
You will need to enter your voting rights exercise code and password (valid only for purposes of thisgeneral meeting) provided in the lower right corner of the voting rights exercise form, enclosed with the
Notice.
2) If you exercise your voting rights both in writing and via the Internet, we will regard the vote cast via theInternet to be effective.
3) If you exercise your voting rights more than once, we will regard the last vote you cast via the Internet tobe the effective one.
4) You will bear all connection charges for using the Internet (service provider access fees, communication
charges, etc.)

2.

Instructions for voting via the Internet
1) Access http://www.it-soukai.com/ or https://daiko.mizuho-tb.co.jp/.
(Please note that the above URLs cannot be accessed from 3:00 a.m. to 5:00 a.m. during the voting
period.)2) Enter the voting rights exercise code and the password and click “log-in.”
3) Proceed to vote in accordance with the onscreen instructions.

3.

Technical specifications
1) Operating system: Windows operating systems
2) Browser: Internet Explorer 5.5 or above
3) Internet connection: Any service providing Internet access4) Mobile phones: Services should be available from any of i-mode, EZweb or Yahoo! Keitai (certain models
cannot be used.) If you are using a cellular phone with bar-code scanner features we request that you use
the QR Code provided in the margin.

4.

Notes on information security
Please rest assured that you will be able to use our systems safely as we use cryptographic technology (128-bitSSL) in order to prevent exercise-related information from being falsified or wiretapped.
The voting rights exercise code and password provided on your voting rights exercise form are an
important means of validating you as our shareholder. Please ensure that they are not disclosed to others.
The Company’s staff will never ask you to disclose your password.

5.

Contact
1) For information concerning the operation of personal computers for the electronic exercise of voting
rights:Internet Help Dial, Stock Transfer Agency Department, Mizuho Trust & Banking Co., Ltd.
Tel: 0120-768-524 (toll-free)
From 9:00 a.m. to 9:00 p.m. excluding Saturdays, Sundays and national holidays
2) For address changes and other matters other than (1) above:
Stock Transfer Agency Department, Mizuho Trust & Banking Co., Ltd.
Tel. 0120-288-324 (toll-free)
From 9:00 a.m. to 5:00 p.m. excluding Saturdays, Sundays and national holidays

Windows and Internet Explorer are registered trademarks of Microsoft Corporation (U.S.)
i-mode is the registered trademark of NTT Mobile Communications Network, Inc. (NTT DoCoMo).
EZweb is the registered trademark of KDDI Corporation.
Yahoo! is the trademark of Yahoo! Inc. of the U.S.
QR Code is the registered trademark of Denso Wave Incorporated.

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