(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 in particular the accuracy ofthis translation, are hereby disclaimed.

■■■ Message to Shareholders—Formulation of the Medium-Term Business Plan 2025—
OKI has formulated its three-year medium-term business plan, “Medium-Term Business Plan 2025,” covering
the period from FY2023 through FY2025.
This plan is to ensure that we steer toward growth, as a company “Delivering OK! to your life,” by breaking
free from the downward trend and strengthening our capacity to adapt to changing environments based on the
new business structure established in April 2023. The plan’s targets for FY2025, its final fiscal year, include
net sales of 450.0 billion yen, operating income of 18.0 billion yen, and a shareholders’ equity ratio of 30%.

OKI’s Vision
OKI solves social issues through critical Mono-zukuri (product manufacturing) and Koto-zukuri (creation ofsolutions and services) as a company “Delivering OK! to your life.”
OKI’s vision for 2031, the 150th anniversary of the company’s founding, is to provide value that leads to theresolution of social issues as a company that does not stop and contributes to the maintenance of social
infrastructure in the three fields of contribution: safe and convenient social infrastructure; job satisfaction andproductivity enhancement; and protection of the global environment.

Medium-Term Business Plan 2025 Basic Policy
In the “Medium-Term Business Plan
2025,” we will steer toward growth andbreak free from the downward trend toachieve this vision. To this end, we will
first return to FY2019 levels of
performance and restore our financial
foundation. In order to create futurebusiness for FY2026 and beyond, we will
implement the following five measures aspart of our steering toward growth 1st
Stage.

-1-

(Translation)

Management Targets
We will break free from the downward trend andachieve net sales and operating income at
FY2019 levels, while restoring the financial
foudation.
Net sales

Operatingincome¥450.0 billion ¥18.0 billion

Shareholder’sequity ratio

30%

-2-

(Translation)■■■ Message to Shareholders— 5 Measures in Steering toward Growth 1st Stage —Revision of Business Portfolio
In April 2023, we reorganized our previous eight business divisions into five business divisions and four
segments (Public Solutions, Enterprise Solutions, Component Products, and EMS) as a new business structure
designed to rationalize business scale, optimize the value chain of the business, and strengthen business
management. This shift has clarified the positioning of each segment. In addition to realizing a dynamic andspeedy business development that includes subsidiaries, we will strengthen business management byintroducing a ROIC perspective. Under this Medium-Term Business Plan, we will strive to improve earnings
by reliably securing large-scale projects and expanding our focus areas with strategies tailored to thepositioning of each segment.

Strengthen Sales, technology, and production functions
Under the new structure, in addition to reorganizing sales sections along market axes, we established the new
Global Business & Marketing Division to restart overseas business. Additionally, we establishedCompanywide organizations: the Technology Division, to manage technology development; and theProduction & Procurement Management Division, to maximize efficiency at all plants while optimizing QCD
and supply chain. By strengthening these functions, the OKI Group will demonstrate its comprehensive
strengths and remain resistant to changes in external conditions and boost its business capabilities.

Create future business
By evolving the Group’s manufacturing foundation and innovation activities, and using the technologies andprocesses developed there for solutions, products, and services, we will create value in the three areas ofcontribution and contribute to solving social and customer issues. We will continue to enhance OKIs’
strengths: edge technologies, including ICT technologies; sensing technologies; and the component
technologies essential to self-service and automation. At the same time, we will focus on data management tomake progress on developing platforms to intensify use of data collected from the real field, with social
infrastructure, manufacturing, and ocean as our focus areas. In addition, we will strengthen innovation
activities centered on the Innovation Business Development Center, which was established as a business unit
responsible for new businesses, and accelerate commercialization for the future in areas such as advanced
remote operations, logistics, healthcare/medical care, and Crystal Film Bonding (CFB), with a view to global
expansion.

Improve financial foundation and effective investments
We will invest to expand our business premised on improving our financial foundations and maintaining our
BBB credit rating. In addition to growing earnings by steadily capitalizing on projects carried over from theprevious Medium-Term Business Plan and on large-scale projects, we will swiftly normalize the excess
working capital caused by supply chain disruptions, and optimize our held assets through the sale of policyheld stocks and other means. We will also steadily implement well-balanced investments including returns toshareholders and active capital investment in growth businesses.

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(Translation)

Practicing Sustainability Management
In addition to formulating the new Medium-Term Business Plan, we have updated our material issues(Materiality) for sustainability management. We plan to make steady progress in environmental, social, andgovernance fields not only by ‟providing products and services that help social issues” in the three areas ofcontribution, but also by “reducing environmental impact through business activities,” “transforming into a
corporate culture that continuously creates value,” and “strengthening management foundation to support
sustainable growth.”
For more details about Medium-Term Business Plan 2025,
please refer to the explanatory materials posted on the Company’s website.
https://www.oki.com/en/ir/-4-

(Translation)■■■ Message to Shareholders—Sustainability Initiatives of The Oki Group—
As a Company “Delivering OK! to your life.”
Based on its corporate philosophy, the OKI Group is working to advance sustainability initiatives as acompany “Delivering OK! to your life.” Through the key Japanese concepts of Mono-zukuri and Koto-zukuri,
we will contribute to resolving social issues and help create a safe and convenient infrastructure for customers
and society as a whole, and we will also practice corporate activities that are worthy of the trust of
stakeholders. On April 1, 2023, the Sustainability Promotion Division was established as a dedicatedorganization to further promote sustainability activities within the OKI Group. We will continue to accurately
disclose the progress of our initiatives and engage in dialogue with stakeholders based on this information to
gain a timely understanding of our own issues and social demands, which will lead to the upgrading of ouractivities.

Environment
As climate change becomes more serious, the OKI Group considers its mission to be to pass on a better global
environment to the next generation through the resolution of social issues, and it promotes environmental
management by considering environment-related business risks and opportunities from a medium- to longterm perspective. We are promoting the provision of products and services that contribute to the resolution ofenvironmental issues while reducing environmental impact such as CO₂ emissions in the manufacturing
process. In addition, we support the TCFD (Task Force on Climate-related Financial Disclosures) from theperspective of creating a positive economic and environmental cycle, and systematically manage climaterelated risks and opportunities as well as measures to address them, while enhancing the disclosure of
information on the details.

Revision to Environmental Vision 2030/2050
OKI committed to the SBT (science-based targets for greenhouse gas reduction that are consistent with theParis Agreement) for global warming prevention and the Company revised the FY2030 targets for
decarbonization in the OKI Environmental Vision 2030/2050 to be in compliance with the SBT. OKI isconsidering and promoting various measures for energy conservation and the introduction of renewableenergy to achieve the targets.
OKI Environmental Vision 2030/2050 global warming prevention targets (FY2030):
42% CO2 emissions reduction at OKI sites and 25% CO2 emissions reduction at
suppliers and from the use of products (compared to FY2020)Society
Establishment of the OKI Group Human Rights Policy
The OKI Group, as a signatory to the United Nations (UN) Global Compact, recognizes that respecting
international human rights norms, including the International Bill of Human Rights and the International
Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work, and considering thehuman rights of each and every person connected to OKI in our operations is the foundation of all corporate-5-(Translation)
activities. We made “Respect for Human Rights” the first principle of the “OKI Group AI Principles,” which
provides guidelines for OKI as a company that offers products and solutions using AI.
In order to further promote such initiatives, in October 2022, we enacted the OKI Group Human Rights Policy
based on the UN Guiding Principles on Business and Human Rights. We will establish mechanisms inaccordance with this policy and develop and implement measures for human rights due diligence and otherrequirements.
For more details on OKI Group’s sustainability initiatives,
please refer to OKI Report 2022 posted on the Company’s website.
https://www.oki.com/en/ir/finance/library/ar2022pdf/ar2022.pdf-6-

(Translation)
Securities Identification Code: 6703
Date of sending by postal mail: June 6, 2023
Start date of measures for electronic provision: May 30, 2023

NOTICE OF 99TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders,Oki Electric Industry Co., Ltd. (the “Company”) would hereby like to inform you that the 99TH ordinary general
meeting of shareholders will be held as follows.
When convening this general meeting of shareholders, the Company takes measures for providing in electronic
format the information that constitutes the content of reference documents for the shareholders meeting, etc.
(items for which measures for providing information in electronic format will be taken). This information isposted on each of the following websites, so please access either of those websites to confirm the information.
If you are unable to attend the meeting in person, you may exercise your voting rights via the Internet, etc. or inwriting. Shareholders are kindly requested to review “Reference Documents for the General Meeting of
Shareholders” and exercise their voting rights by no later than 5:15 p.m. on June 26 (Monday), 2023 (JST).
The Company’s website:
https://www.oki.com/jp/ir/stock/meeting.html (in Japanese)
TSE website (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show (in Japanese)(Please access the TSE website by using the Internet address shown above, enter “Oki Electric Industry” in“Issue name” or the securities code “6703” in “Code,” and click “Search.” Then, click “Basic information”
and select “Documents for public inspection/PR information.” Under “Filed information available for public
inspection,” click “Click here for access” under “[Notice of General Shareholders Meeting /Informational
Materials for a General Shareholders Meeting].”)Website for informational materials for the general meeting of shareholders:
https://d.sokai.jp/6703/teiji/ (in Japanese)
Exercise of voting rights via the Internet, etc.:
Please access the voting site designated by the Company (https://soukai.mizuho-tb.co.jp/ (in Japanese)), use the“voting right exercise code” and “password” indicated on the enclosed ballot, and follow the instructions on thescreen to enter your approval or disapproval of the proposals. When exercising your voting rights via theInternet, etc., please refer to the “Instructions for the Exercise of Voting Rights via the Internet, etc.” below.
Exercise of voting rights in writing (postal mail):
Please indicate your approval or disapproval to each agenda in the space provided on the enclosed ballot andreturn it to the Company by mail so that it arrives before the deadline shown above.
Yours faithfully,
Takahiro Mori
President, Representative Director-7-

(Translation)
Oki Electric Industry Co., Ltd.
1-7-12 Toranomon, Minato-ku, Tokyo

1.
2.

Date and Time:
Location:

Tuesday, June 27, 2023, from 10:00 a.m. (Reception will open at 9:30 a.m.)“Providence Hall,” 2F Tokyo Prince Hotel, 3-3-1 Shiba-koen, Minato-ku, Tokyo
The venue is different from last year, so please be careful not to mistake the venue.

3. Meeting Agenda
Items to be reported:
1. Business Report, Consolidated Financial Statements and audit results of the Consolidated
Financial Statements by the Accounting Auditor and the Audit & Supervisory Board for the
99th fiscal year (from April 1, 2022 to March 31, 2023)
2. Non-consolidated Financial Statements for the 99th fiscal year (from April 1, 2022 to March
31, 2023)
Items to be resolved:
Agenda Item 1:
Agenda Item 2:
Agenda Item 3:
Agenda Item 4:

Appropriation of Surplus
Election of Eight (8) Directors
Election of One (1) Audit & Supervisory Board Member
Determination of Compensation for the Performance-linked Stock Compensation
Plan for Directors

4. Items to be decided upon convocation(1) Among the items subject to measures for electronic provision, in accordance with the provisions of laws
and regulations and Article 15 of the Articles of Incorporation of the Company, the following items are notprovided in the paper-based documents to be delivered to shareholders who requested the delivery of paperbased documents. Accordingly, (i) to (iii) below are included in the scope of audits by the Audit &Supervisory Board Members and the Accounting Auditor when they create their respective audit reports.
(i) “Major offices,” “Employees,” “Major creditors,” “Corporate governance,” “Other significant eventsof the OKI Group,” “Shareholders’ Equity,” “Equity Warrants,” “Status of Accounting Auditor” and“Policies and procedures of the Company” in the Business Report(ii) Consolidated Financial Statements(iii) Non-consolidated Financial Statements(iv) Audit Reports (Audit Reports of the Accounting Auditor and the Audit & Supervisory Board,
including Consolidated Financial Statements)(2) If you exercise your voting rights in duplicate via both the Internet, etc. and the voting rights exercise form,
we will regard the vote cast via the Internet, etc. to be effective. If you exercise your voting rights morethan once via the Internet, etc., we will regard the last vote you cast to be the effective one.
(3) If no approval or disapproval is indicated to the respective agendas in the returned voting rights exercise
form, it will be treated as an approval vote.
◎◎◎

If attending the meeting in person, please submit the enclosed voting rights exercise form to reception.
If amendment to the items subject to measures for electronic provision arise, a notice of the amendment
and the details of the items before and after the amendment will be posted on each of the websites shown
above.
Due to the revision of the Companies Act, the reference documents for the general meeting of shareholders,-8-(Translation)business report, non-consolidated financial statements, consolidated financial statements, etc. will, in
principle, be available on the website provided in this Notice of Ordinary General Meeting of Shareholders
instead of being mailed in writing. From the viewpoint of providing information to shareholders, theCompany has also attached to this Notice of Ordinary General Meeting of Shareholders a “Summary” ofthe reference documents for the general meeting of shareholders and major items related to businessperformance and management.

-9-(Translation)
Instructions for the Exercise of Voting Rights
Method of exercising voting rights recommended
To exercise your voting rights via postal mailPlease indicate your approval or disapproval to each agenda on the enclosed voting rights exercise form, andreturn the completed form.
* If the voting rights exercise form that indicates neither approval nor disapproval to each agenda is submitted,
we will regard that you indicated your approval to the proposals.
Deadline for voting:
To be received no later than 5:15 p.m. on June 26 (Monday), 2023 (JST).
To exercise your voting rights by electromagnetic means (via the Internet)
Please access the voting site (https://soukai.mizuho-tb.co.jp/ (in Japanese)) by a smartphone, personal computeror the like, and input your approval or disapproval to each agenda in accordance with the instructions on thescreen.
Please refer to the following page for details.
Deadline for voting:
To be received no later than 5:15 p.m. on June 26 (Monday), 2023 (JST).
Treatment of Voting Rights Exercised Multiple Times
If you exercise your voting rights in duplicate via both postal mail and the Internet, etc., we will regard thevote cast via the Internet, etc. to be effective.

If you exercise your voting rights more than once via the Internet, etc., we will regard the last vote you cast
to be the effective one.
To exercise your voting rights by attending the General Meeting of Shareholders
Please submit the enclosed voting rights exercise form to reception.
Date and time of the General Meeting of Shareholders: From 10:00 a.m. on June 27 (Tuesday), 2023 (JST)- 10 -

(Translation)

Instructions for the Exercise of Voting Rights via the Internet, etc.
[When using smartphone]
How to scan QR Code
1. To exercise your voting rights via smartphone,
you do not need to enter your “voting rights
exercise code” and “password.” You can log inby reading the “QR code for login” indicated on
the slip of enclosed ballot (right side).
* “QR code” is a registered trademark of Denso
Wave Incorporated.
2. Please input approval or disapproval to each
proposal in accordance with the instructions on
the screen.
* Exercising voting rights by the above method isavailable only once.
Please follow the instructions on the right for thesecond and subsequent login.
Exercising voting rights by “Smart Exercise” isavailable only once.
If you need to change your votes after excising
your voting rights, please log in the voting site fora personal computer by using your “voting rights
exercise code” and “password” provided on thevoting rights exercise form and exercise yourvoting rights again.
* If you rescan the QR code, you can access the
Exercise of Voting Rights Website for a
personal computer.

If you have any inquiries about the operation of apersonal computer, a smartphone or a cellular phone
regarding the exercise of voting rights via theInternet, please contact on the right-hand side:

How to entervoting rights exercise code and password

How to use the voting site
Voting site:
https://soukai.mizuho-tb.co.jp/ (in Japanese)

1.

Please access the voting site.

2.

Please enter the “voting rights exercise code”
printed on the voting rights exercise form.

3.

Please enter the “password” printed on thevoting rights exercise form.

4.

Please input approval or disapproval to each
proposal in accordance with the instructions on
the screen.

Internet Help Dial, Stock Transfer Agency Department,
Mizuho Trust & Banking Co., Ltd.
Tel: 0120-768-524 (toll free, only in Japan)(Operating hours: 9:00 a.m. to 9:00 p.m.)

Institutional investors can utilize the electronic voting platform operated by ICJ, Inc.

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(Translation)

Reference Documents for the General Meeting of Shareholders
Agenda Items and Reference Matters
Agenda Item 1:

Appropriation of Surplus

The Company has given consideration to matters including the business performance of the fiscal year
under review, business earnings projections for the next fiscal year (FY2023), the Company’s financial position,etc., and it proposes to pay year-end dividends for the fiscal year under review as follows.
1.

Type of dividend asset
Cash

2.

Allocation of dividend assets and total amount of dividends
Common stock of the Company¥20 per share
Total dividends¥1,732,375,980

3.

Effective date of dividend of surplus
June 28, 2023

(Reference) Shareholder Return Policy
OKI’s top management priorities are to strengthen its financial position and ensure retained earnings in order to continually
improve the OKI Group’s corporate value, as well as to increase shareholder returns so that shareholders are encouraged to hold its
shares over the medium- to long-term.
OKI will reinforce its management foundations by applying retained earnings to investments in research & development andfacilities that are critical to future growth.
OKI will determine the amount of dividends, attaching top priority to the continuation of
the stable distribution of profits to shareholders and taking its business results and future management measures, etc. comprehensively
into consideration.

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(Translation)
Agenda Item 2:

Election of Eight (8) Directors

The tenure of office of all eight (8) Directors will expire at the conclusion of this general meeting ofshareholders. Accordingly, the Company proposes the election of eight (8) Directors, and the candidates areshown as follows. The candidates for Directors have been approved by the Board of Directors after
deliberation by the Personnel Affairs and Compensation Advisory Committee, consisting of four (4) members,
all of whom are Outside Directors.

CandidatenumberName

1Shinya Kamagami

2Takahiro Mori

Re-election
InsideRe-election
InsideCurrent position/
responsibility in the Company

Number ofattendance atmeetings of theBoard of Directors

Number of years
in office100%
Director and Chairman of the Board

President, Representative Director andChief Executive Officer(13 out of 13
times)

9 years100%(10 out of 10
times)

1 yearSenior Executive Vice President
3

Masayuki Hoshi

Re-election
InsideChief Compliance Officer

100%

Chief Financial Officer(13 out of 13
times)

Chief Human Resource Officer

7 years

Internal Control Administrator
4

Teiji Teramoto

5

Shigeru Asaba

Newly nominatedInsideExecutive Vice President

Re-election
Outside(13 out of 13
times)

Independent Outside Director(13 out of 13
times)

Independent Outside Director(13 out of 13
times)

Independent Outside Director(12 out of 13
times)

Re-election
Tamotsu Saito

OutsideRe-election

Izumi Kawashima

OutsideIndependentRe-election

Makoto Kigawa

Outside5 years

100%

Woman
8

6 years

100%

Independent

7– years

100%
Independent Outside Director

Independent
6-%(– out of – times)

5 years

92%

Independent- 13 -

4 years(Translation)
Number of years in office as Director:
Candidatenumber

1

Shinya Kamagami

9 years(as of the conclusion of this general meeting of shareholders)Number of attendance at meetings of the Board of Directors(the year under review):
13 out of 13 times(100%)
Number of Oki shares held:
Common stock:
16,600 shares

Brief personal profile, position and responsibility in the Company andsignificant concurrent positions
Apr. 1981
Joined Oki Electric Industry Co., Ltd.
Apr. 2001

Manager, Hardware Development Department No. 2, Terminal Systems Division,
Systems Solution Company

Apr. 2005

Head of Systems Hardware Development Division, Systems Hardware Company,
Systems Networks Business Group

Apr. 2011

Executive Officer

Apr. 2012
Senior Vice President(Born on February 9, 1959)
Jun. 2014
Senior Vice President and Member of the Board[Re-election]
Apr. 2016
President, Representative Director
Expected knowledge andApr. 2022
Representative Director and Chief Executive Officer
experience
Corporate management
Apr. 2023
Director and Chairman of the Board (incumbent)
MarketingTechnology & innovation Reason for the selection of candidate for Director
Legal affairs &Based on his past experience serving in business divisions and headquarters divisions, Mr. Shinyarisk management
Kamagami has the knowledge and experience to decide important matters and supervise the business
Manufacture & SCM
execution of Directors and Executive Officers in an appropriate, fair, and efficient manner. Mr.
Kamagami assumed the office of Director in June 2014, and had been engaging in management of
the Company as President and Representative Director since fiscal 2016, and as Representative
Director and Chief Executive Officer in fiscal 2022. He has been providing the management teamwith support and advice as Director and Chairman of the Board since April 2023. He is nominatedas a candidate for Director as it is expected that, as a member of the Board of Directors, he willcontinue to share information with other Directors and strengthen the decision-making function.

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(Translation)
Number of years in office as Director:
Candidatenumber2

Takahiro Mori

1 year(as of the conclusion of this general meeting of shareholders)Number of attendance at meetings of the Board of Directors(the year under review):
10 out of 10 times(100%)
Number of Oki shares held:
Common stock
3,500 shares

Brief personal profile, position and responsibility in the Company andsignificant concurrent positions
Apr. 1988
Joined Oki Electric Industry Co., Ltd.
Nov. 2006

General Manager of Partner Business Dept, Domestic Sales Division, Oki Data
Corporation

Oct. 2017

Director, Deputy Head of Product Development and Business Division, and Headof Office Printing Department, Oki Data Corporation

Apr. 2019

Managing Executive Officer, Head of Product Development and Business Division,
Oki Data Corporation(Born on August 29, 1964)[Re-election]

Oct. 2019

Managing Executive Officer, Head of Product Development and Business Division,and Head of Domestic Sales Division, Oki Data Corporation

Expected knowledge andexperience
Corporate management
MarketingTechnology & innovation
Human resourcesmanagement
Legal affairs &risk management

Apr. 2020

Representative Director and President, Oki Data Corporation and Executive
Officer, Oki Electric Industry Co., Ltd.

Apr. 2021

Executive Officer, Head of Business Collaboration Division, Components &Platforms Business Group, Oki Electric Industry Co., Ltd.

Apr. 2022

President and Chief Operating Officer

Jun. 2022

President, Representative Director and Chief Operating Officer

Apr. 2023

President, Representative Director and Chief Executive Officer (incumbent)

Reason for the selection of candidate for Director
Mr. Takahiro Mori has knowledge and experience necessary for deciding important matters for theCompany and supervising job execution by Directors and Executive Officers in an appropriate, fairand efficient manner, based on his past experience in marketing divisions and the management of a
subsidiary, etc. Mr. Mori assumed the office of Executive Officer at the Company and the office ofPresident at Oki Data Corporation in April 2020. He has taken charge of the Company’s
management as President, Representative Director and Chief Operating Officer since fiscal 2022 andas Chief Executive Officer since fiscal 2023. He is nominated as a candidate for Director as it isexpected that, as a member of the Board of Directors, he will share information with other Directors
and strengthen the decision-making function.

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(Translation)
Number of years in office as Director:
Candidatenumber3

Masayuki Hoshi

7 years(as of the conclusion of this general meeting of shareholders)Number of attendance at meetings of the Board of Directors(the year under review):
13 out of 13 times(100%)
Number of Oki shares held:
Common stock:
8,400 shares

Brief personal profile, position and responsibility in the Company andsignificant concurrent positions
Apr. 1982
Joined The Fuji Bank, Limited
Apr. 2007

General Manager of Global Trade Finance Division, Mizuho Corporate Bank, Ltd.

Apr. 2009

Executive Officer, General Manager of Corporate Banking Division No.17

Apr. 2011

Managing Executive Officer, Head of Global Transaction Banking Unit

Jun. 2014

Managing Executive Officer, Mizuho Financial Group, Inc.

May 2015

Senior Vice President, Oki Electric Industry Co., Ltd.

(Born on March 9, 1960)[Re-election]

Apr. 2016

Chief Risk Management Officer, Head of Corporate Planning Group

Jun. 2016

Senior Vice President and Member of the Board

Expected knowledge andexperience
Human resourcesmanagement
GlobalFinance & accounting
Legal affairs &risk management

Apr. 2017

Executive Vice President and Member of the Board, Chief Financial Officer(incumbent)

Jun. 2018

Chief Compliance Officer (incumbent)

Apr. 2019

Senior Executive Vice President, Representative Director, Chief Information
Officer

Apr. 2021

Chief Human Resources Officer (incumbent)

Jun. 2022

Senior Executive Vice President, Director (incumbent)

Apr. 2023

Internal Control Administrator (incumbent)

Reason for the selection of candidate for Director
Mr. Masayuki Hoshi has abundant experience gained as Managing Executive Officer at the Mizuho
Financial Group, which the candidate comes from, and has a deep understanding of governance andperspective related to the global business on which the Company focuses. He also has theknowledge and experience to decide important matters and supervise the business execution of
Directors and Executive Officers in an appropriate, fair, and efficient manner. Mr. Hoshi assumed
the office of Director in June 2016, and had been playing a core role in management by serving as
Senior Executive Vice President and Representative Director from fiscal 2019 to fiscal 2021. He is
nominated as a candidate for Director as it is expected that, as a member of the Board of Directors,
he will share information with other Directors and strengthen the decision-making function.

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(Translation)
Number of years in office as Director:
Candidatenumber4

Teiji Teramoto–(as of the conclusion of this general meeting of shareholders)Number of attendance at meetings of the Board of Directors(the year under review):– out of – times(–%)
Number of Oki shares held:
Common stock:
3,800 shares

Brief personal profile, position and responsibility in the Company andsignificant concurrent positions
Apr. 1985
Joined The Fuji Bank, Ltd.

(Born on June 10, 1962)[Newly nominated]
Expected knowledge andexperience
MarketingGlobalFinance & accounting
Legal affairs &risk management

Jul. 2010

General Manager, Europe Division, Mizuho Corporate Bank, Ltd.

Apr. 2012

General Manager, Investment Banking Coordination Division, Mizuho Corporate
Bank, Ltd. & Mizuho Bank, Ltd.

Apr. 2013

Executive Officer, General Manager, Investment Banking Coordination Division,
Mizuho Financial Group, Inc. & Mizuho Bank, Ltd.

Apr. 2014

Executive Officer, Europe, Middle East and Africa, Mizuho Bank, Ltd.

Apr. 2015

Managing Executive Officer, Head of Europe, Middle East and Africa, Mizuho
Financial Group, Inc. & Mizuho Bank, Ltd.

Apr. 2017Managing Executive Officer, Mizuho Financial Group, Inc. and Managing
Executive Officer, Head of Global Corporate Division, Mizuho Bank, Ltd.

Apr. 2018

Senior Managing Executive Officer, Head of the Americas, Mizuho Financial
Group, Inc. & Mizuho Bank, Ltd.

Jul. 2021

Senior Vice President, Deputy Head of Marketing & Sales Group, and Deputy
Head of Components & Platforms Business Group, Oki Electric Industry Co., Ltd.

Apr. 2022

Senior Vice President, Head of Marketing & Sales Group, Deputy Head ofComponents & Platforms Business Group, and Head of Business Collaboration
Division

Apr. 2023

Executive Vice President (incumbent)

Reason for the selection of candidate for Director
Mr. Teiji Teramoto has abundant experience gained as Senior Managing Executive Officer at
Mizuho Financial Group, Inc., which the candidate comes from, and has broad insight on global
businesses and sales. Moreover, Mr. Teramoto has the knowledge and experience to decide
important matters of the Company and supervise the business execution of Directors and Executive
Officers in an appropriate, fair, and efficient manner. He has been playing a core role inmanagement by serving as Senior Vice President, Head of Marketing & Sales Group, Deputy Headof Components & Platforms Business Group, and Head of Business Collaboration Division since
fiscal 2022. He is nominated as a candidate for Director as it is expected that, as a member of theBoard of Directors, he will share information with other Directors and strengthen the decisionmaking function.

- 17 -

(Translation)
Number of years in office as Director:
Candidatenumber5

Shigeru Asaba

6 years(as of the conclusion of this general meeting of shareholders)Number of attendance at meetings of the Board of Directors(the year under review):
13 out of 13 times(100%)
Number of Oki shares held:
Common stock:
1,700 shares

Brief personal profile, position and responsibility in the Company andsignificant concurrent positions
Apr. 1992
Associate Professor, Faculty of Economics, Gakushuin University(Born on May 21, 1961)[Outside][Re-election][Independent]
Expected knowledge andexperience
MarketingTechnology & innovation
Human resourcesmanagement

Mar. 1994

Ph.D., Economics, University of Tokyo

Apr. 1997

Professor, Faculty of Economics, Gakushuin University

Apr. 2013

Professor, Graduate School of Commerce, Waseda University

Apr. 2016

Professor, Waseda Business School (Graduate School of Business and Finance)(incumbent)

Jun. 2016

Outside Director, Nippon Beet Sugar Manufacturing Co., Ltd. (incumbent)

Sep. 2016

Dean, Waseda Business School (Graduate School of Business and Finance)

Jun. 2017

Outside Director, Oki Electric Industry Co., Ltd. (incumbent)

Reason for the selection of candidate for Outside Director and expected role, etc.
Mr. Shigeru Asaba is currently a professor of Waseda Business School (Graduate School of Businessand Finance). Mr. Asaba has academic expertise in business in general and high ethical standards
through his specialist knowledge in the fields of industrial organizations, corporate strategy,
competitive strategy, ownership structures, corporate governance and corporate conduct. In
addition, he has a high degree of independence from the management team, experience as an outside
director of other companies, and serves as the chairman of the Personnel Affairs and Compensation
Advisory Committee. Based on the above, and particularly on his academic expertise in all aspectsof business, including marketing and innovation, Mr. Asaba is nominated as a candidate for Outside
Director as it is expected that he will contribute to the deepening of deliberations on the progress of
Medium-Term Business Plan, oversight of the development plan of successors, and improvement ofrisk and crisis response at the Board of Directors meetings. Although he has never had experienceof being involved in corporate management other than as an outside officer, the Company
determined that he will be able to carry out the duties of Outside Director appropriately for the
aforementioned reason.
Significant concurrent positions and business relationships with the Company
Position/
responsibilities at Category
Business relationshipthe entity
Nippon Beet Sugar
Outside Director Listed
There are no business relationships between
Manufacturing Co., Ltd.
Nippon Beet Sugar Manufacturing Co., Ltd.
and OKI Group.
Entity- 18 -

(Translation)
Number of years in office as Director:
Candidatenumber6

5 years(as of the conclusion of this general meeting of shareholders)Number of attendance at meetings of the Board of Directors(the year under review):
13 out of 13 times(100%)
Number of Oki shares held:
Common stock:
5,300 shares

Tamotsu Saito

Brief personal profile, position and responsibility in the Company andsignificant concurrent positions
Apr. 1975
Joined Ishikawajima-Harima Heavy Industries Co., Ltd.

(Born on July 13, 1952)[Outside][Re-election][Independent]
Expected knowledge andexperience
Corporate management
MarketingTechnology & innovation
Human resourcesmanagement
GlobalLegal affairs &risk management
Manufacture & SCM

Jun. 2006

Executive Officer, Vice President of Aero-Engine & Space Operations

Apr. 2008

Director, Executive Officer, President of Aero-Engine & Space Operations, IHI
Corporation

Apr. 2011

Executive Vice President

Apr. 2012

President

Apr. 2016

Chairman of the Board

Jun. 2017

Outside Director, JAPAN POST INSURANCE Co., Ltd. (incumbent)

Jun. 2018

Outside Director, Oki Electric Industry Co., Ltd. (incumbent)

Apr. 2020

Director, IHI Corporation

Jun. 2020

Advisor (incumbent)

Jun. 2021

Outside Director, Furukawa Electric Co., Ltd. (incumbent)

Jun. 2022

Outside Director, KAJIMA CORPORATION (incumbent)

Apr. 2023

Chairman, New Energy and Industrial Technology Development Organization(incumbent)

Reason for the selection of candidate for Outside Director and expected role, etc.
As a long-time representative director of IHI Corporation and a business leader not only in theindustry but also in Japan, Mr. Tamotsu Saito has a wealth of management experience and highethical standards in the manufacturing industry. In addition, he has a high degree of independence
from the management team, experience as an outside director of other companies, and serves as themember of the Personnel Affairs and Compensation Advisory Committee. Based on the above, andparticularly on his manufacturing, development and global management experience, he is nominatedas a candidate for Outside Director as it is expected that he will contribute to the deepening ofdeliberations on the progress of Medium-Term Business Plan, oversight of the development plan ofsuccessors, and improvement of risk and crisis response at the Board of Directors meetings.
Significant concurrent positions and business relationships with the Company
Position/
responsibilities at Category
Business relationshipthe entity
IHI Corporation
Advisor
ListedThe volume of transactions between IHI
Corporation and OKI Group accounts forless than 1% of each company’s net sales.
JAPAN POST
Outside Director Listed
The volume of transactions between
INSURANCE Co., Ltd.
JAPAN POST INSURANCE Co., Ltd. and
OKI Group accounts for less than 1% ofeach company’s net sales.
Mr. Tamotsu Saito is scheduled to retire inJune 2023.
Furukawa Electric Co., Outside Director Listed
The volume of transactions between
Ltd.
Furukawa Electric Co., Ltd. and OKI Groupaccounts for less than 1% of eachcompany’s net sales.
Entity- 19 -

(Translation)
KAJIMA
CORPORATION

Outside Directors Listed

New Energy andIndustrial Technology
Development
Organization

Chairman- 20 -Other

The volume of transactions between
KAJIMA CORPORATION and OKI Groupaccounts for less than 1% of eachcompany’s net sales.
The volume of transactions between New
Energy and Industrial Technology
Development Organization and OKI Groupaccounts for less than 1% of eachcompany’s net sales.

(Translation)
Number of years in office as Director:
Candidatenumber7

Izumi Kawashima

5 years(as of the conclusion of this general meeting of shareholders)Number of attendance at meetings of the Board of Directors(the year under review):
13 out of 13 times(100%)
Number of Oki shares held:
Common stock:
1,000 shares

Brief personal profile, position and responsibility in the Company andsignificant concurrent positions
Mar. 1985
Left Graduate School of Law, Waseda University after completing a doctoral
course(Born on June 25, 1955)[Outside][Re-election][Independent][Woman]Expected knowledge andexperience
Human resourcesmanagement
Legal affairs &risk management

Apr. 1989

Associate Professor, Faculty of Economics, Gifu Keizai University

Apr. 1996

Professor, School of Law, Senshu University

Sep. 2004

Professor, Faculty of Social Sciences, Waseda University (incumbent)

Jun. 2016

Outside Director, Oki Electric Cable Co., Ltd.

Jun. 2018

Outside Director, Oki Electric Industry Co., Ltd. (incumbent)

Reason for the selection of candidate for Outside Director and expected role, etc.
Ms. Izumi Kawashima is currently a professor of the Faculty of Social Sciences at Waseda
University. She specializes in commercial law (mainly the Companies Act) and the Financial
Instruments and Exchange Act, and particularly has academic specialist knowledge relating to theCompanies Act and corporate governance as well as high ethical standards. In addition, she has ahigh degree of independence from the management team, and has devoted her energies to the displayof the Board of Directors functions as the chairperson of the Company’s Board of Directors sinceJune 2021. Ms. Kawashima also has experience as an outside director of other companies, andserves as a member of the Personnel Affairs and Compensation Advisory Committee. Based on theabove, and particularly on her knowledge as a legal expert in the Companies Act and the Financial
Instruments and Exchange Act, etc., she is nominated as a candidate for Outside Director as it isexpected that she will contribute to the deepening of deliberations on the progress of Medium-TermBusiness Plan, oversight of the development plan of successors, and improvement of risk and crisis
response at the Board of Directors meetings. Although she has never had experience of being
involved in corporate management other than as an outside officer, the Company determined that she
will be able to carry out the duties of Outside Director appropriately for the aforementioned reason.

- 21 -

(Translation)
Number of years in office as Director:
Candidatenumber8

Makoto Kigawa

4 years(as of the conclusion of this general meeting of shareholders)Number of attendance at meetings of the Board of Directors(the year under review):
12 out of 13 times(92%)
Number of Oki shares held:
Common stock:
900 shares

Brief personal profile, position and responsibility in the Company andsignificant concurrent positions
Apr. 1973
Joined The Fuji Bank, Ltd.
Apr. 2004

Managing Director, Mizuho Corporate Bank, Ltd.

Mar. 2005

Resigned Mizuho Corporate Bank, Ltd.

Nov. 2005

Representative Managing Director, Yamato Holdings, Co., Ltd.

Apr. 2011

Representative Director, Executive Officer and President

Jun. 2016

Outside Director, Komatsu Ltd.

(Born on December 31, 1949) Apr. 2018
[Outside]
Jun. 2018[Re-election]
Jun. 2019[Independent]
Expected knowledge andexperience
Corporate management
Marketing
Human resourcesmanagement
Finance & accounting
Legal affairs &risk management
Manufacture & SCM

Chairperson of the Board of Directors, Yamato Holdings, Co., Ltd.
Outside Director, Seven Bank, Ltd. (incumbent)
Outside Director, Oki Electric Industry Co., Ltd. (incumbent), retired as Director,
Special Advisor, Yamato Holdings Co., Ltd. (incumbent)

Apr. 2020

Outside Corporate Auditor, The Higo Bank, Ltd.

Jun. 2021

Outside Director, The Higo Bank, Ltd. (incumbent)

Jun. 2022

External Board Member, ICMG Co., Ltd. (incumbent)

Reason for the selection of candidate for Outside Director and expected role, etc.
After serving as an officer at a financial institution, Mr. Makoto Kigawa served as Representative
Director of Yamato Holdings Co., Ltd. for more than ten years, and has extensive management
experience and high ethical standards, mainly in the logistics industry, including the transformationof business models using ICT. In addition, he has a high degree of independence from the
management team, experience as an outside director of other companies, and serves as the memberof the Personnel Affairs and Compensation Advisory Committee. Based on the above, andparticularly on his supply chain management and risk management experience, he is nominated as a
candidate for Outside Director as it is expected that he will contribute to the deepening ofdeliberations on the progress of Medium-Term Business Plan, oversight of the development plan ofsuccessors, and improvement of risk and crisis response at the Board of Directors meetings.
Significant concurrent positions and business relationships with the Company
Position/responsib
Category
Business relationshipilities at the entity
Yamato Holdings, Co., Special Adviser
ListedThe volume of transactions between
Ltd.
Yamato Holdings, Co., Ltd. and OKI Groupaccounts for less than 1% of eachcompany’s net sales.
Seven Bank, Ltd.
Outside Director Listed
There are no business relationships between
Seven Bank, Ltd. and OKI Group.
The Higo Bank, Ltd.
Outside Director Unlisted The volume of transactions between The
Higo Bank, Ltd. and OKI Group accounts
for less than 1% of each company’s net
sales.
ICMG Co., Ltd.
External Board
Unlisted There are no business relationships between
MemberICMG Co., Ltd. and OKI Group.
EntityNotes:
1. There is no special conflict of interest between each candidate and the Company.

- 22 -

(Translation)
2.
3.

4.

5.

6.

7.

Mr. Shigeru Asaba, Mr. Tamotsu Saito, Ms. Izumi Kawashima, and Mr. Makoto Kigawa are candidates for outside directors.
When Mr. Tamotsu Saito was a director of IHI Corporation, it was revealed that the maintenance of commercial aircraft engines
was performed inappropriately. In March 2019, pursuant to the Aircraft Manufacturing Industry Act, the Ministry of Economy,
Trade and Industry ordered that IHI Corporation conduct the necessary repairs in an approved manner. In April 2019, IHI
Corporation received a business improvement order from the Ministry of Land, Infrastructure, Transport and Tourism in accordancewith the Civil Aeronautics Law. It came to light that at JAPAN POST INSURANCE Co., Ltd., where Mr. Tamotsu Saito has been
an outside director since June 2017, there was a case pertaining to contract transfers, etc. where it is possible to have caused a loss
without acting in accordance with customers’ wishes. With regard to this case, the aforementioned company received
administrative sanctions from the Financial Services Agency on December 27, 2019 based on the Insurance Business Act.
However, Mr. Saito fulfilled his duties by continuously making proposals from the viewpoint of legal compliance, and after thiscase came to light, he made proposals, etc. in order to protect customers and prevent recurrence.
Mr. Makoto Kigawa served as a director of Yamato Holdings Co., Ltd. until June 2019. In February 2017, the Yamato Groupstarted to investigate the actual labor hours of employees and found out various problems remained unrecognized, such as no enoughbreaks for many employees. Because this situation was considered to be serious, the Yamato Group has been promoting workstyle reforms, for example, “improve and strictly conduct labor management” and “promote a work-life balance,” and implementing
various structural reforms. Yamato Home Convenience Co., Ltd., a consolidated subsidiary of Yamato Holdings Co., Ltd., madepayment requests in an inappropriate manner in violation of contract provisions when it provided relocation services to employeesof its corporate customers. In January 2019, it became subject to an administrative disposition and received a business
improvement order from the Ministry of Land, Infrastructure, Transport and Tourism. Yamato Holdings Co., Ltd. has striven tobuild the necessary structure to prevent Yamato Home Convenience Co., Ltd. from facing similar situations and to strengthen
governance in order to enhance the soundness of group management.
The Company has entered into a liability limitation agreement with Mr. Shigeru Asaba, Mr. Tamotsu Saito, Ms. Izumi Kawashima,
and Mr. Makoto Kigawa. The outline of the agreement is provided in “Company Officers” of the Business Report. If theirreappointment is approved, the Company will continue this agreement with them.
The Company has entered into a directors and officers liability insurance policy, naming all Directors as insured, and a summary of
it is shown in “Company Officers” of the Business Report. The Company plans to continue and renew this policy, and if theappointment of each candidate is approved and they are appointed as Directors, each candidate will be insured under the policy.
Mr. Shigeru Asaba, Mr. Tamotsu Saito, Ms. Izumi Kawashima, and Mr. Makoto Kigawa are independent officers based on theterms of the Tokyo Stock Exchange. If their reappointment is approved, they will continue to be independent officers. Pleaserefer to the Company’s website for its independence criteria. (https://www.oki.com/en/ir/corporate/governance/officers.html)- 23 -

(Translation)(Reference)

Skills Matrix for the Board of Directors Following the Approval of Agenda Item 2 (Plan)

The Company thinks that skills its Board of Directors needs as a whole for performing its roles and fulfilling its responsibilities
become satisfied when respective Directors display their abilities by making the most of knowledge and experience expected fromthem according to the Company’s management philosophy, vision and management plans, etc.

OutsideInsideThe Company expects the display of skills in the following fields in particular.
・ “Corporate management,” such as management strategy, business management and business strategy, for increasing the earning
power of businesses and strengthening the governance structure・ “Marketing” for promoting the development of eco-systems in collaboration with customers
・ “Technology & innovation” for developing new businesses toward the goals of further business development and growth・ “Human resources management” for securing human resources necessary for sustainable growth, cultivating abilities, giving
employees job satisfaction, and enabling them to display abilities
・ “Global” viewpoints for globalizing operations indispensable for securing growth opportunities
・ “Finance & accounting” and “Legal affairs & risk management” that act as the basis for making decisions related to management
and business activities
・ “Manufacture & SCM” that act as important management bases in strengthening manufacturing and enhancing competitivenesscomprising the Company’s strengths
Corporate
management

MarketingTechnology &innovation

Shinya Kamagami

●

●

●

Takahiro Mori

●

●

●

Human
resources
management●

Teiji Teramoto●

Shigeru Asaba

〇

〇

〇

〇

〇

〇

〇

Izumi Kawashima
Makoto Kigawa

Finance &accounting●

Masayuki Hoshi

Tamotsu Saito

Global〇〇Manufacture
& SCM

●

●

●
●

●

●

●

●

●

〇

〇

〇
〇

Legal affairs& riskmanagement〇〇〇

The above list does not represent all knowledge and experience respective individuals have.
●Required skills for Directors that have been acquired as a result of business execution experience at the OKI Group (up to five skills)〇
Outside experience and specialist knowledge the Company expects in particular- 24 -〇〇

(Translation)
Agenda Item 3:Election of One (1) Audit & Supervisory Board Member

Among the current five (5) Audit & Supervisory Board Members, the tenure of office of Audit &Supervisory Board Member Toshiya Hatakeyama will expire at the conclusion of this general meeting ofshareholders. Accordingly, the Company proposes the election of one (1) Audit & Supervisory Board Member.
The candidate for Audit & Supervisory Board Member is as follows:This agenda has been approved by the Audit & Supervisory Board.
Number of years in office as Audit & Supervisory Board Member:

Masashi Fuse–
(as of the conclusion of this general meeting of shareholders)Number of attendance at meetings of the Board of Directors(the year under review):
13 out of 13 times(100%)
Number of attendance at meetings of the Audit & Supervisory Board(the year under review):– out of – times(–%)
Number of Oki shares held:
Common stock:
4,700 shares

Brief personal profile, position and significant concurrent positions
Apr. 1984
Joined Oki Electric Industry Co., Ltd.
Jun. 1994

Oki America Inc.

Apr. 2015

Head of Accounting & Control Division, Oki Electric Industry Co., Ltd.

Jun. 2015

Outside Director, SAXA Holdings, Inc.

Apr. 2016

Executive Officer, Oki Electric Industry Co., Ltd.

Apr. 2018

Senior Executive Officer and Head of Corporate Management Group(Born on February 23, 1961) Jun. 2019
[Newly nominated]
Apr. 2020

Senior Executive Officer and Member of the Board
Senior Vice President and Member of the Board and Head of Corporate Group,
Internal Control Administrator

Apr. 2021

Senior Vice President and Member of the Board and Representative Director,
President and Chief Executive Officer, Oki Proserve Co., Ltd.

Apr. 2022

Chief Information Officer

Apr. 2023

Associate Director and Member of the Board (incumbent)

Reason for the selection of candidate for Audit & Supervisory Board Member
As Head of Accounting & Control Division, Head of Corporate Group, and Chief Information
Officer of the Company, Mr. Masashi Fuse has been instrumental in strengthening the Company’s
financial base and OKI-G’s information base. The Company judges that he is able to provide
appropriate supervision over the business management based on his past experience as President andRepresentative Director of Oki Proserve Co., Ltd. He is nominated as a candidate for Audit &Supervisory Board Member as it is expected that, as a member of the Audit & Supervisory Board, hewill be able to provide his appropriate opinions and advice from a compliance perspective, share
information with other Audit & Supervisory Board Members, and play a role in auditing the
Directors’ performance of their duties.
Notes:
1. There is no special conflict of interest between Mr. Masashi Fuse and the Company.
2. Mr. Masashi Fuse has served in the positions described above and has extensive knowledge in finance, accounting and judicial
affairs necessary for auditing of the Company.
3. If the appointment of Mr. Masashi Fuse is approved, the Company will enter into a liability limitation agreement with him. The
outline of this agreement is provided in “Company Officers” of the Business Report.

- 25 -

(Translation)
4.

The Company has entered into a directors and officers liability insurance policy, naming all Audit & Supervisory Board Members
as insured, and a summary of it is shown in “Company Officers” of the Business Report. The Company plans to continue andrenew this policy, and if the appointment of Mr. Masashi Fuse is approved and he is appointed as Audit & Supervisory Board
Member, he will be insured under the policy.

- 26 -

(Translation)
Agenda Item 4:

Determination of Compensation for the Performance-linked Stock Compensation Plan
for Directors

1. Purpose and reason for the proposal
The Company’s compensation system for directors consists of basic compensation, incentive
compensation linked to the performance of each fiscal year, and medium- to long-term incentive
compensation. Of this compensation, the amount of monetary compensation as basic compensation andannual incentive compensation was approved at the 82nd Ordinary General Meeting of Shareholders heldon June 29, 2006, with the limit of ¥600 million per year for Directors (not including the salary for Directors
as employees who also serve as employees). In addition, separately from such monetary compensation,
the amount of non-monetary compensation as medium- to long-term incentive compensation was approvedat the 92nd Ordinary General Meeting of Shareholders held on June 24, 2016 and the 97th Ordinary General
Meeting of Shareholders held on June 29, 2021, as compensation related to stock acquisition rights, which
are stock options as compensation to directors excluding Outside Directors, with the limit of ¥100 million
per year.
In order to further strengthen the linkage with the Medium-Term Business Plan and stock price, wehave decided to review the medium- to long-term incentive compensation, which is separate from themonetary compensation approved by the Board of Directors, with the limit of ¥600 million per year, and to
newly introduce performance-linked stock compensation plan (hereinafter “the plan” in this proposal) for
our Directors (excluding internal Directors not serving concurrently as Executive Officers and Outside
Directors (hereinafter “eligible Directors”)) and abolish the existing stock compensation system based onequity warrants, which were compensation-type stock option. This plan is to grant monetary compensation
claims to the eligible Directors in exchange for the delivery of the calculated number of shares of common
stock of the Company as described in 2. below (hereinafter the “Company’s shares” in this proposal). The
three-year period corresponding to the Medium-Term Business Plan is the period subject to performance
evaluation (hereinafter the “performance evaluation period” in this proposal), and the evaluation anddelivery of the Company’s shares will be made every three years.
The details are as described in 2. below, and we ask for your approval for the introduction of the plan.
This proposal has been decided by the Board of Directors after deliberation by the Personnel Affairs andCompensation Advisory Committee.
The total number of the Company’s shares to be issued or disposed of to the eligible Directors under
this plan is capped at 120,700 shares (per fiscal year), and even if the Company were to continue issuingshares at this maximum number for 10 years, the dilution would be minimal at approximately 1.38% of thetotal number of outstanding shares. A portion of these shares will be paid in cash, so the actual dilution
will be even smaller.
Currently there are two (2) eligible Directors, and if Proposal 2 is approved, the number of eligible
Directors will be three (3).
With the introduction of the plan, subject to the approval of this proposal, there will be no newissuance of equity warrants, which are compensation-type stock options to directors in the future (stock
options that have already been granted will remain).
The structure of the plan, as described below, is designed to meet the above objectives. The
Company established the policy on determining the content of individual compensation, etc. for Directors,
and a summary is described in the Business Report under “Company Officers,” which, if this proposal isapproved, will be revised to include the plan.
In light of the above, the Company believes that the contents of this proposal are appropriate.
- 27 -

(Translation)
2. Outline of the plan
(1) Contents of compensation, etc.
The Company’s Board of Directors will set targets for the Company’s performance, etc. during theperformance evaluation period in advance, and monetary compensation claims will be issued to the eligible
Directors to deliver the number of the Company’s shares in accordance with the degree of achievement, etc.
of such targets (the eligible Directors will pay such monetary compensation claims as assets contributed in
kind and will be issued or disposed of the Company’s shares). In addition, this is a performance-linked
stock-based compensation plan in which a cash amount corresponding to the share price of the Company’s
shares is granted as compensation for the performance evaluation period. Accordingly, the grant of suchmonetary compensation claims to the eligible Directors and the payment of cash will be made after the endof the performance evaluation period, in principle.
Because the grant of monetary compensation claims and the delivery of shares of the Company andthe payment of cash to the eligible Directors will be made after the expiration of the performance evaluation
period, at the time of introduction of the plan, it is not possible to determine whether or not such grant andpayment will be made to the eligible Directors, the number of the Company’s shares to be delivered andpaid in case such grant and payment are made, and the amount of monetary compensation claims and cash
to be paid to grant the Company’s shares. In addition, it is prohibited for the eligible Directors to transfer
or offer as security any rights to receive monetary compensation claims and delivery of shares of theCompany and the payment of cash under the plan.
The initial performance evaluation period shall be the three fiscal years from April 2023 to March
2026, which correspond to the period of the Company’s Medium-Term Business Plan, and thereafter, inprinciple, the performance evaluation period shall continue for each of the three fiscal years corresponding
to the period of the Medium-Term Business Plan after the initial performance evaluation period.
(2) Maximum number of shares to be delivered and maximum amount of compensation, etc. for eligible
Directors
The total number of the Company’s shares to be delivered to the eligible Directors shall be 362,100
shares or less for each performance evaluation period, and the total amount of remuneration, etc. to be paid
to the eligible Directors shall be calculated by multiplying 362,100 shares by the closing price of theCompany’s shares on the Tokyo Stock Exchange on the business day immediately preceding the date ofresolution of the Board of Directors regarding issuance or disposal of the Company’s shares (if notransaction is effected on that date, the most recent closing price shall be used; below, “share price at thetime of delivery” in this proposal).
Because the performance evaluation period is three fiscal years as described in 2. (1) above, themaximum amount per fiscal year shall be the number of shares and the amount equivalent to one-third of
the total number of shares and the maximum amount per fiscal year, respectively. However, in the eventof a stock split of the Company’s shares (including a gratis allotment of the Company’s shares) or a reverse
stock split after the date of resolution of this proposal, or any other event requiring adjustment of such total
number of shares, the number of shares shall be adjusted in accordance with such split ratio or reverse split
ratio, etc.
(3) Calculation method of the number of shares and the amount of money to be delivered under the plan(a) Performance evaluation index and factor
A factor shall be set within a certain range according to the degree of achievement of
performance targets separately determined in advance by the Board of Directors.
(b) Calculation method- 28 -

(Translation)
The number of shares to be delivered or the amount of money to be paid to the eligible Directors
will be calculated in accordance with the contents of compensation, etc. described in 2. (1) above.
The Board of Directors of the Company will determine the standard number of shares to be delivered
and the payment rate, etc., which will be determined based on the position, etc., of the eligible Director.
The calculation method of the number of shares to be delivered and the monetary amount is asfollows.
Number of shares to be delivered = standard number of shares to be delivered (base amount*1 /share price at the time of grant*2) × grant ratio*3 × grant
ratio (50%)
Amount of money ={standard number of shares to be delivered (base amount*1 / share price at thetime of grant*2) × grant ratio - number of the Company’s shares to be granted}
× share price at the time of grant*1. The base amount shall be determined by the Company’s Board of Directors based on the positionof each grantee.
*2. The stock price at the time of grant shall be the average closing price of the Company’s shareson the Tokyo Stock Exchange for the one-month period preceding the day immediately
preceding the date of this General Meeting of Shareholders.
*3. The grant ratio shall be calculated in the range of 0% to 250% based on the degree ofachievement of the ROE and sales targets for the performance evaluation period. The standard
targets primarily use the targets set in the Medium-Term Business Plan. The payment ratio shallbe 100% when the standard targets are achieved, 250% when the highest targets are achieved or
exceeded, 50% when the minimum targets are achieved, and 0% when the minimum targets are
not achieved. Each target is decided by the Board of Directors after deliberation by the Personnel
Affairs and Compensation Advisory Committee so that the appropriate degree of difficulty isgiven to them based on the nature of the performance evaluation index, etc.
*4. If the delivery of the number of shares of the Company and the payment of cash calculated by
the above formula may cause the maximum number of shares to be delivered or the maximum
amount to be paid to each eligible Director to be exceeded, the Company’s Board of Directors
shall determine the maximum number of shares to be delivered or the maximum amount to be
paid to each eligible Director by a reasonable method determined by the Board of Directors,
including proportional distribution, so as to keep the amount within these maximum limits.
(4) Conditions for delivery of the Company’s shares and payment of cash to the eligible Directors
Under the plan, shares of the Company shall be delivered and cash payment shall be made to theeligible Directors upon completion of the performance evaluation period and fulfillment of the following
requirements. However, if an eligible Director dies and retires during the performance evaluation period,
payment shall be made under the terms and conditions determined by the Board of Directors at the time ofretirement. If an eligible Director retires during the performance evaluation period or is newly appointed
as an eligible Director during the performance evaluation period, the amount shall be prorated in accordancewith the period of service.
(i) The eligible Director held the position of Director of the Company at any time during theperformance evaluation period(ii) The eligible Director has not committed certain acts of misconduct as determined by the Board- 29 -

(Translation)of Directors of the Company(iii) Other requirements determined by the Board of Directors of the Company as necessary to achieve
the purpose of the plan are satisfied
In the event that a merger agreement in which the Company becomes a defunct company, a shareexchange agreement in which the Company becomes a wholly owned subsidiary, a share transfer plan, orother matters related to reorganization, etc. are approved at a General Meeting of Shareholders of theCompany (however, in cases where approval by a General Meeting of Shareholders of the Company’s is not
required for such reorganization, etc., the Board of Directors of the Company shall approve thereorganization, etc.), or if there is any other reason deemed justifiable by the Board of Directors of theCompany, if necessary, the Company’s Board of Directors may, at a time reasonably determined by the
Board of Directors, deliver or pay a reasonably adjusted number and amount of shares and money, or, in lieu
of such delivery, etc., pay an amount of money reasonably calculated by the Board of Directors as an amountequivalent to such shares and money.
(5) Other
The handling of this plan at the time of reorganization, etc., the handling of the maximum number ofshares and the maximum amount at the time of stock split or reverse stock split, and other details of thisplan shall be determined by a resolution of the Board of Directors.
(Reference)
If this proposal is approved, there will be no new issuance of equity warrants, which arecompensation-type stock options to Executive Officers who do not concurrently serve as Directors of theCompany in the future (stock options that have already been granted will remain), and we plan to introduce
a system similar to the plan.

- 30 -

(Translation)

Business Report(From April 1, 2022 to March 31, 2023)
1.

Status of the OKI Group(1) Operating progress and results
Business environment
Although the recovery of economic activities is progressing due to the improvement in the COVID-19
situation, the future of the economy remains uncertain due to the increased geopolitical risks associated withthe prolonged situation in Russia and Ukraine, unstable foreign exchange rates, and other factors. In addition,
disruptions in the supply chain, such as soaring raw material prices and shortages of materials, especiallysemiconductors, continued during the period under review.
Under such circumstances, OKI aims at perfecting the foundation to achieve sustainable growth throughthe on-going structural reforms, and is working to realize products and services that resolve seven social issues(aging problems, natural disasters, traffic issues, environmental issues, labor shortages, labor productivity, andthe infectious diseases) based on the OKI Group’s materiality.

Operating results for the fiscal year under review
For the business conditions in the fiscal year, net sales were ¥369.1 billion, a year-on-year increase of
4.8% or ¥17.0 billion. Although the impact of production declines due to shortages of materials such as
semiconductors a continued throughout the fiscal year, net sales increased due to the positive impact of foreignexchange rates as well as the inclusion of projects that were delayed from the previous fiscal year.
For the profit side, operating income was ¥2.4 billion, a year-on-year decrease of ¥3.5 billion, primarily
due to the supply chain crisis mainly of the parts shortages and sharp price rise despite the positive effects ofan increase in volume due to the inclusion of projects that were pushed back from the previous fiscal year,
optimization of selling prices, and fixed cost reductions. Excluding foreign exchange effects and one-time
gains recorded in the previous period, operating income was almost unchanged from the previous period.
Sales and profits are expected to recover in the next fiscal year as a result of strengthening supply chain impact
measures, including enhancement of procurement capabilities and response to alternative parts and materials
due to design changes, which were prioritized in the current fiscal year.
Ordinary loss was ¥0.3 billion yen (a deterioration of ¥8.0 billion year-on-year) due to a decrease inoperating income and a deterioration in the foreign exchange gain or loss included in the non-operating section.
Loss attributable to owners of parent was ¥2.8 billion, a deterioration of ¥4.9 billion year-on-year. Thiswas mainly due to a decrease in extraordinary loss from structural reforms.
Looking at non-consolidated business performance, net sales were ¥234.9 billion, operating loss was¥16.9 billion, ordinary loss was ¥8.6 billion and loss was ¥6.3 billion.
Please refer to the financial results presentation materials posted on our website for more detailed information
on financial results for the fiscal year ended March 31, 2023.
https://www.oki.com/en/ir/data/presen.html- 31 -

(Translation)
The OKI Group manufactures and sells products, builds systems and provides solutions, and performs
construction, maintenance, and other services in the two business segments of “Solution Systems” and“Components & Platforms” and “Others.” The main businesses by business segment are as follows.
This has been changed to “Public Solutions,” “Enterprise Solutions,” “Component Products,” “EMS,”
and “Others,” effective from April 1, 2023.
- Major business
Segment

Major business

Solution Systems
Business

This segment is mainly engaged in manufacturing and sales of the following products, system building andprovision of solutions, providing construction, maintenance, and other services. [Transportation infrastructure
systems, disaster prevention-related systems, defense-related systems, aircraft equipment,
telecommunications equipment for telecommunications carriers, financial sales branch systems, centralized
office systems, reservation ticketing systems, IP-PBX, business phones, contact centers, 920 MHz band
multi-hop radio systems, etc.]

Components & Platforms
Business

This segment is mainly engaged in manufacturing and sales of the following products, and other services.
[ATM, cash processors, store terminals, reservation ticket terminals, check-in terminals, currency exchange
machines, ATM monitoring and operation services, color and monochrome LED printers, color andmonochrome LED multifunction machines, large format inkjet printers, dot impact printers, contract design
and production services, printed circuit boards, etc.]

Others“Others” includes the service provision, manufacture and sales of other devices or products.

- Net Sales by Segments(Unit: Billions of yen)Segment

FY2021 (reference:previous fiscal
year)

FY2022 (Fiscal
year under review)

Changes (amount)

Changes (%)

Solution Systems

162.6

179.4

16.8

10.3

Components & Platforms

189.0

189.2

0.2

0.1

Others
Total

0.4

0.5

0.1

24.6

352.1

369.1

17.0

4.8

Net sales and operating income from external customers by business segment are as follows.
<Solution Systems Business>
Net sales came to ¥179.4 billion, a year-on-year increase of 10.3% or ¥16.8 billion. Net sales increased in all businessareas, mainly due to the inclusion of projects from the previous period and an increase in sales from the acquired aircraft
equipment business in the Public Solutions business. Operating income was ¥8.5 billion, a year-on-year decrease of ¥1.0
billion due to the negative impact of higher material prices and foreign exchange rates, as well as higher costs for softwaredevelopment projects in the Enterprise Solutions business.
<Components & Platforms Business>
Net sales came to ¥189.2 billion, a year-on-year increase of 0.1% or ¥0.2 billion. In the Mono-zukuri Platform business field,
sales for FA/semiconductor manufacturing equipment continued to be strong. On the other hand, in the Components business,
although foreign exchange rates had a positive impact on revenue in the information equipment business, the impact of lower
production due to a shortage of parts and materials in the Automation Systems business was significant, resulting in a decline
in revenue. Operating loss was ¥0.1 billion, a deterioration of ¥3.6 billion year-on-year. The impact of increased revenue
in the Mono-zukuri Platform business area and the effect of fixed cost reductions through structural reforms at overseas
subsidiaries offset the decline in revenue in the Components business, and as a result, on a real basis, excluding the one-time
gains recorded in the previous fiscal year, revenue was almost unchanged from the previous fiscal year.
<Others>
Net sales of the other business segment were ¥0.5 billion, up ¥0.1 billion or 24.6% year-on-year, and operating income
increased by ¥0.1 billion to ¥0.4 billion.

- 32 -

(Translation)(2) Capital expenditure and research and development expenses
Capital expenditures and research and development expenses for the fiscal year under review
equaled ¥12.7 billion and ¥9.6 billion, respectively.
Investment by segment were as follows.
(Unit: Billions of yen)Segment

Solution Systems

Amount of capital expenditure(Amount of research anddevelopment expenses)

Major capital expenditure

3.9

(2.7)

Upgrading, etc. of facilities to design/manufacture new
products and incidental facilities of plants in business areas(e.g. social infrastructure, IoT, finance, and network
systems)
Development of new automated products to solve social
issues such as labor shortages and non-contact/non-personal
contact, as well as investment in production capacity
expansion to strengthen comprehensive mono-zukuri
services

Components &Platforms

8.2

(4.9)

Others/Companywide (shared)

0.6

(2.1)

12.7

(9.6)

Total

(3) Financing
Operating funds and funds for capital expenditures necessary for business activities will beobtained from our own funds, borrowed funds, or other sources. Among these, operating funds areraised through short-term and long-term borrowings. In addition, long-term funds for production
facilities, etc. are raised through long-term borrowings. Long-term funds are raised on fixed interest
rates in the forms of separate borrowings from financial and other institutions and syndicated loans.
As for financing, the Company utilizes a domestic cash management system, whereby theCompany integrates the funds of consolidated subsidiaries into the Company itself to improve the cash
efficiency and reduce borrowings.
Cash in hand and deposits that the Company owns has been kept at a sufficient level. The
Company maintains good business relationships with major partner financial institutions, so recognizes
that it will be able to raise operating and capital investment funds necessary for business activities
without any problem. However, for more stable financing, we renewed the commitment line agreement
to prepare for contingencies and the supply chain crisis including the parts shortages and soaring raw
material costs.
The OKI Group places emphasis on the financial discipline and intends to use free cash flow
generated through business activities as basic financial resources and efficiently raise the necessary funds.

- 33 -

(Translation)(4) Future challenges
Guided by its corporate philosophy of “The people of OKI, true to the Company’s “enterprisingspirit,” are committed to creating superior network solutions and providing excellent information andcommunications services globally to meet the diversified needs of communities worldwide in theinformation age,” the OKI Group aims to resolve social issues through critical Mono-zukuri (the spirit
and mind-set to innovate, create and improve products) and Koto-zukuri (working together, proactively
seeking opportunities that deliver value to customers).”
We recognize that the business environment surrounding the OKI Group is becoming even more
uncertain globally due to environmental issues such as climate change and conflicts. In addition to theimpact of the COVID-19, the world economy and people’s lives continue to be affected by various
changes, such as fluctuations in raw material and energy prices due to geopolitical risks and other factors.
These changes in the environment have had a significant impact on our business, and we have notachieved our Medium-Term Business Plan 2022. We believe that “respond to environmental changes”
is necessary to overcome this uncertain business environment and achieve sustainable growth. In
addition, we will promote transformation into a corporate culture that continues to create value amid thelarge and rapid trends in the world, such as advances in digital technology, changes in people’s awarenessand behavior, and growing awareness of sustainability.
In FY2023, we will formulate our Medium-Term Business Plan 2025, which will end in FY2025,
and strive to realize our vision for 2031, with the key message, “Delivering OK! to your life,” as we steer
the company toward growth and strengthen our ability to respond to changes in the environment. In
the new Medium-Term Business Plan, we will work to recover our damaged financial base by breaking
out of the shrinking equilibrium and steadily securing sales and recovering profitability. Specifically,
under a simple business structure centered on speedy decision-making and improved comprehensive
strength, we will clarify the positioning of our businesses and implement the optimal strategy for eachbusiness to steadily secure sales and strengthen profitability. We will also leverage OKI’s edge
technologies and know-how, which are our strengths, to aggressively take on challenges not only inexisting business areas but also in new areas where growth is expected, with the aim of creating futurebusinesses. In addition to the formulation of the new Medium-Term Business Plan, we will steadily
promote sustainability management by implementing the updated materiality of “providing products andservices that help social issues,” “reducing environmental impact through business activities,”“transforming into a corporate culture that continuously creates value,” and “strengthening managementfoundation to support sustainable growth.”- 34 -

(Translation)(5) 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.
96th year(FY2019)

97th year(FY2020)99th year(Fiscal year underreview, FY2022)

98th year(FY2021)Net sales

457.2

billion yen

392.9

billion yen

352.1

billion yen

369.1

Profit attributable toowners of parent

14,086

million yen(819)

million yen

2,065

million yen(2,800) million yen

Basic earnings pershare

162.80yen(9.47)

yen

23.85

yen

32.33

yen

Total assets

372.5

billion yen

371.5

billion yen

369.2

billion yen

390.4

billion yen

Net assets

106.4

billion yen

111.6

billion yen

107.6

billion yen

99.3

billion yen

Net assets per share

1,227.42

yen

1,286.41

yen

1,240.62

yenbillion yen

1,143.96

yen

Notes:
1. Basic earnings 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 outstanding at the year-end. These figures exclude treasury
stocks.
2. The accounting policies have been updated for configuration and customization costs in cloud computing agreements inthe 98th fiscal year (fiscal 2021); therefore, the associated values in the 97th fiscal year (fiscal 2020) have retrospectively
been applied corrections.
3. The Company has applied “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020)
and related implementation guidance from the beginning of the 98th fiscal year (fiscal 2021), and the figures for the 98th
fiscal year onward are figures after application of the accounting standard.

(6) Status of major subsidiaries(i) Status of major subsidiariesName

OKI Crosstech Co., Ltd.

Capital2,001 million yen

Company’s
voting rightratio (%)

Major business

100

Maintenance, construction and sales of
information processing equipment andtelecommunications equipment
Design and construction of electronic
works and electronic
telecommunications works

OKI Circuit Technology Co.,Ltd.

480 million yen

100

Development, design, manufactureand sales of printed circuit boards,
electronic equipment and electronicparts

OKI Software Co., Ltd.

400 million yen

100

Development and operation of
telecommunications system software

100

Manufacturer and sales of electricalwire, electronic equipment parts,
metal products and synthetic resinmaterial processed goods

Oki Electric Cable Co., Ltd.

4,304 million yen

OKI Nextech Co., Ltd.

400 million yen

100

Development, design, manufacturer,
sales and maintenance of informationand communications devices,
industrial electronic devices, medical
electronic equipment and otherelectronic devices as well as electronicparts

Oki Data Manufacturing(Thailand) Co., Ltd.

420 million baht

100

Manufacturing of printers, etc.

Oki Europe Ltd.

141 million euro

100

Sales of printers, etc.

- 35 -

(Translation)
(ii)
1)

2)

Major partners
Major technical partners:
International Business Machines Corporation (US)Canon Inc.
Major business partners:
Hewlett-Packard Company (US)Cisco Systems G.K.

- 36 -

(Translation)(7) Major offices
Our major offices are as follows.
Name

Classification

Location

Head office

Minato-ku, Tokyo

Branch offices

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)

Business offices

Minato-ku (Tokyo), Warabi (Saitama), Honjo (Saitama),
Takasaki (Gunma), Tomioka (Gunma), Numazu(Shizuoka), and Akiruno (Tokyo)

Research institutes

Warabi (Saitama) and Osaka (Osaka)

Oki Electric Industry Co., Ltd.

OKI Crosstech Co., Ltd.

Head officeChuo-ku (Tokyo)

OKI Circuit Technology Co., Ltd.

Head office

Tsuruoka (Yamagata)

OKI Software Co., Ltd.

Head office

Warabi (Saitama)

Oki Electric Cable Co., Ltd.

Head office

Kawasaki (Kanagawa)

OKI Nextech Co., Ltd.

Head office

Tokorozawa (Saitama)

Oki Data Manufacturing(Thailand) Co., Ltd.

Head office

Oki Europe Ltd.

Head office

ThailandUK(8) Employees(i) Employees by segment
Segment

Number of employees
OKI Group

Oki Electric Industry

Solution Systems

6,707

2,567

Components & Platforms

6,651

1,548

Others469－

Company-wide (shared)

625

625

14,452

4,740

Total

(ii)

Employees of Oki Electric Industry
Number of employees

Average age

Average years ofservice

Average annual
wage (yen)4,740 (decreased by 20 from the end of the previous
fiscal year)

44.8

19.9

7,286,422(9) Major creditors
Major creditors of the OKI Group are as follows:(Unit: Billions of yen)
Creditor

Loan balance

Mizuho Bank, Ltd.

39.0

Sumitomo Mitsui Banking Corporation

25.3

Mizuho Trust & Banking Co., Ltd.

7.4

The Norinchukin Bank

4.0

Resona Bank, Limited

3.2- 37 -

(Translation)(10) Corporate governance(i)

Basic policy
Guided by the corporate philosophy of “The people of OKI, true to the company’s“enterprising spirit,” are committed to creating superior network solutions and providing excellent
information and communications services globally to meet the diversified needs of communities
worldwide in the information age,” the OKI Group recognizes sustainable growth and increases
corporate value over medium- to long-term as its most important management priorities in earning
the trust of its various stakeholders. To this end, we are working to enhance corporate governancebased on our fundamental policies of “enhancement of management fairness and transparency,”“timely decision-making processes,” and “full compliance and fortification of risk management.”(ii)

Corporate governance structure(a) Outline of the structure
As a company with the Audit & Supervisory Board, the Company establishes the Board of
Directors and Audit & Supervisory Board and adopts an executive officer system, aiming topromote “timely decision-making processes” by separating business execution and supervision.
From April 2023, the President, Representative Director of the Company assumed the role of Chief
Executive Officer (CEO), and will concentrate authority over business management to speed up
the decision-making process in order to achieve the goals of the Medium-Term Business Plan 2025.
In addition, the Company also works on the “enhancement of management fairness andtransparency” by nominating Outside Directors as well as setting up a voluntary committee
concerned with personnel affairs and compensation, so as to ensure effective supervision from an
independent and objective standpoint. In addition to audits by the Audit & Supervisory Boardand its members, OKI seeks to ensure “full compliance and fortification of risk management,” suchas by establishing the Risk Management Committee.
During the fiscal year under review (fiscal 2022), the Company was operated by nine
Directors, including four Outside Directors (including one female Director); five Audit &Supervisory Board Members, including three Outside Audit & Supervisory Board Members; and16 Executive Officers not serving concurrently as Directors. All the Outside Directors andOutside Audit & Supervisory Board Members are independent officers who are neutral andindependent of the management. Furthermore, there is no system to receive consulting and advice,
etc., from former representative directors and presidents, etc.
(b) Reason for selecting the current structure
The Company judges that it can stably achieve “enhancement of management fairness andtransparency,” “timely decision-making processes,” and “full compliance and fortification of risk
management” by conducting various measures including (i) enhancing the supervisory function of
the Board of Directors by separating business execution and supervision and promoting active
involvement of outside directors; (ii) having objective auditing by Audit & Supervisory Board
members who are independent of management and have a strong authority for investigation; and(iii) establishing voluntary Personnel Affairs and Compensation Advisory Committee. The
Company will continue to seek sustainable growth and increase corporate value from a mediumto long-term viewpoint while recognizing its responsibility to its stakeholders and complying withthe aims of the Corporate Governance Code.
- 38 -

(Translation)(iii) General Meeting of Shareholders
The General Meeting of Shareholders of the Company, a company with the Board of
Directors, resolves items set forth in laws and regulations, and the Articles of Incorporation. The
Board of Directors is authorized to resolve the following matters in accordance with relevant laws
and regulations. It is stipulated that the amount of dividends, other than interim dividends, isdetermined at general meetings of shareholders.
(a) Organization to determine the acquisition of treasury stock
The Articles of Incorporation stipulate that the Company may acquire treasury stock throughmarket transactions, etc. upon a resolution of the Board of Directors pursuant to Article 165,
paragraph (2) of the Companies Act to swiftly implement capital policies.
(b) Organization to determine interim dividend
The Articles of Incorporation stipulate that the Company may pay interim dividends upon aresolution of the Board of Directors to distribute profits swiftly to shareholders.
(c) Requirements for special resolutions of a general meeting of shareholders
The Articles of Incorporation stipulate that, for smooth operations of general meetings ofshareholders, special resolutions at a general meeting of shareholders set forth in Article 309,
paragraph (2) of the Companies Act are passed by a majority of two-thirds or more of the votes ofthe shareholders present at the meeting where the shareholders holding one-third or more of votesof the shareholders entitled to vote at such shareholders meeting are present.
(iv) Board of Directors(a) Duties, Composition, Operations, etc.
During the fiscal year under review, the Board of Directors consisted of nine Directors, helda meeting once a month in principle as well as special meetings when necessary, decided on
significant matters including basic management policy, and supervised business execution basedon laws and regulations, and the Articles in Incorporation.
To secure the functions of the Board of Directors, the Company selects candidates for
Directors in consideration of diversities, such as expertise, career and gender, based on the skills
matrix in the Reference Documents for the General Meeting of Shareholders, and includes four
Independent Outside Directors (including one female Director) to improve the fairness andtransparency of management, thinking that the roughly equal numbers of internal Executive
Directors and highly independent Outside Directors create an appropriate balance.
The Board of Directors is chaired by a Director who is mutually appointed, but was chairedby an Outside Director during the fiscal year under review.
The Board of Directors held 13 meetings during the fiscal year under review, of which two
meetings were attended by all Directors except for one absentee. The attendance rates of theOutside Directors and Outside Audit & Supervisory Board Members are shown in “Outside
Directors and Audit & Supervisory Board Members” of the Business Report. To contribute to indepth discussions at the Board of Directors meetings, outside officers are given materials andexplanations in advance by the secretariat of the Board of Directors, etc.
During the fiscal year under review, the Board of Directors meetings concentrated on
deliberations for the formulation of the Medium-Term Business Plan 2025 (held 9 times, including
off-site meetings). In addition, with a view to enhancing ESG initiatives, the Board of Directors- 39 -

(Translation)
also deliberated on the revision of the basic policy on the development of internal control systems,
the revision of the environmental vision, and the formulation of the OKI Group Human Rights
Policy. Furthermore, complying with the aims of the Corporate Governance Code, the Board of
Directors continues to deepen discussions on the reduction of cross-shareholdings, dialogue withshareholders (SR implementation plan), publication of the FY2022 version of the OKI Report, theIntegrated Report, and board effectiveness evaluations, etc.
In addition, based on the
deliberations and reports of the Personnel Affairs and Compensation Advisory Committee, thisyear the Committee also deliberated and resolved on a development plan of successors andrevisions to the officer compensation system.
(b) Matters concerning Directors
i. Number of Directors
The Articles of Incorporation stipulate that the number of Directors of the Company shallbe no more than 15.
ii. Requirements for resolution of election of Directors
The Articles of Incorporation stipulate that resolutions for election of Directors shall bepassed by more than half of the votes of the shareholders present at the meeting where theshareholders holding one-third or more of votes of the shareholders entitled to vote at suchshareholders meeting are present, and that no cumulative vote is adopted in the election of
Directors.
iii. Tenure of office
The Articles of Incorporation stipulate that the tenure of office of Directors shall be set as
one year to clarify management responsibility for each fiscal year.
(v)

Voluntary committee
The Company has established the Personnel Affairs and Compensation Advisory Committee
as a voluntary committee to secure transparency and objectiveness in the decision-making
processes concerning appointment and dismissal of Directors and determination of compensationfor officers. The Committee is consulted prior to resolutions at a Board of Directors meeting on
appointment and dismissal of Directors, Executive Officers, etc. and the structure and level of theircompensation, deliberates on these issues from an objective viewpoint, and reports the results to
the Board of Directors. In addition, the Committee delivers its opinion on nomination ofcandidates for Audit & Supervisory Board Members to Audit & Supervisory Board Members.
During the fiscal year under review, the Committee consisted of four members, all whom are
Outside Directors, and was chaired by an Outside Director by resolution of the Board of Directors.
The Committee held 12 meetings in the fiscal year under review, with all members in attendanceat each meeting.
During the fiscal year under review, the committee deliberated and reported to the Board of
Directors on such issues as the executive structure for achieving the Medium-Term Business Plan
2025, the revision of the executive compensation system so that it functions sufficiently as anincentive to enhance performance for the continuous enhancement of corporate value, and the longterm issue of development plan of successors (management human resources development).

(vi) Election and dismissal of company officers
Upon the nomination of candidates for Directors and Audit & Supervisory Board Members
and appointment of Executive Officers, the Company takes into consideration that the candidate
satisfies the following requirements, as well as legal eligibility.
 Those with excellent personality, insights, high ethical standards, fairness and integrity- 40 -

(Translation)
as well as a high-level awareness of compliance Those who can execute their duties towards the realization of the OKI Group’s
corporate philosophy and continuous improvement of the corporate value
 Those who have had a long term of office Audit and Supervisory Board Members who have the necessary knowledge of finance,accounting and legal affairs
 Outside officers who satisfy the independence criteria
A dismissal of a director, Audit & Supervisory Board member, or executive officer is
proposed in cases where the said person engages, or is likely to engage, in an act in violation oflaws and regulations or the Articles of Incorporation, or where a certain event occurs, which makes
it difficult for the said person to fulfill the duties appropriately, and the Personnel Affairs andCompensation Advisory Committee is promptly consulted and deliberates on such an event, andreports the results and proposes a dismissal to the Board of Directors.
(vii) Matters related to stocks owned by the Company (As of March 31, 2023)(a) Policy on cross-shareholdings
The Company will reduce cross-shareholdings phase by phase as a result of comprehensive
consideration of conditions such as the medium- and long-term improvement of the corporate valueof the Company and a share certificate-issuing company. The Company aims to achieve a net
asset ratio of approximately 20% by the end of FY2025, the final year of the new Medium-TermBusiness Plan.
(b) Outline of consideration-related cross-shareholdings
Every year, the Board of Directors validates cross-shareholdings. The decision on thesuitability of holding is made for each stock based on a comprehensive consideration ofquantitative and qualitative factors.
(c) Standards for the exercise of voting rights regarding cross-shareholdings
For the exercise of voting rights regarding cross-shareholdings, we classify proposals as
follows, establish standards for exercise to make a decision and exercise the rights.
 In case of a proposal to elect an officer, the total number, ratio of independent officers, etc.
 In case of a proposal related to remuneration for officers, performance, asset status, etc.
 In case of a proposal for appropriation of surplus, performance, condition of retained
earnings, etc.
 We shall pay extra attention to the deliberation of a proposal for anti-takeover measures,
M&A or third-party allocation of shares.

- 41 -

(Translation)(d) Number of brands of the stocks that the Company owns for purposes other than pureinvestment and the total amount recorded in the balance sheet

Number of stocks(Stock)Total amountrecorded in thebalance sheet(Unit: Billionsof yen)96th year(FY2019)

97th year(FY2020)98th year(FY2021)

Unlisted stock

75

66

59

52

50

Stocks other thanunlisted stock

38

27

25

26

24

Total

113

93

84

78

74

Unlisted stock

6.3

6.3

6.3

6.2

6.2

Stocks other thanunlisted stock

33.8

25.4

29.2

25.3

25.0

Total

40.2

31.7

35.5

31.5

31.2

40.2
31.7
113

95th year(FY2018)

99th year(Fiscal year
under review,
FY2022)95th year(FY2018)

35.5

31.5

31.2

93

84

78

74

96th year(FY2019)

97th year(FY2020)98th year(FY2021)99th year(Fiscal year under review, FY2022)

Total amount recorded in the balance sheet(Unit: Billions of yen)

Number of stocks (Stock)(11) Other significant events of the OKI GroupOki Banking Systems (Shenzhen) Co., Ltd. (hereinafter “OBSZ”), a consolidated subsidiary of theCompany in China, includes accounts receivable of RMB1,111.957 million (¥21,594 million if converted
to Japanese yen based on the exchange rate as of the end of the fiscal year under review) from Shenzhen
Yihua Computer Industrial Co., Ltd. (hereinafter “Yihua Industrial”) in long-term trade receivables.
OBSZ filed a request for arbitration with the South China International Economic and Trade Arbitration
Commission, on October 10, 2015, demanding payment of such accounts receivable and compensationof damages (Case A). Further, OBSZ filed litigation to commingle property beyond legal personality
with the High People’s Court of Guangdong Province against Shenzhen Yihua Computer Co., Ltd.
(“Yihua Computer”), the parent of Yihua Industrial, and others as defendants, claiming that they are
jointly and severally responsible for payment of the above claims against Yihua Industrial which had
been unpaid, to request protection of property (Case B).
Subsequently, Case A was adjudicated by the South China International Economic and Trade
Arbitration Commission on December 16, 2020, and it ruled that Yihua Industrial pay OBSZ the unpaid
amount for merchandise of RMB1,096.866 million (¥21,301 million if converted to Japanese yen basedon the exchange rate as of the end of the fiscal year under review) as well as interest for arrears, legal
costs, and others, and this is being settled by arbitration. Regarding Case B, on December 23, 2021,
the High People’s Court of Guangdong Province sentenced Yihua Computer and affiliates to take thecollective liability for the payment to be made by Yihua Industrial to OBSZ. In response to this, Yihua
Computer and affiliates lodged an appeal to the Supreme People’s Court on January 5, 2022. The caseis currently pending. The OKI Group is making every effort to collect the full amount awarded.
- 42 -

(Translation)
2.

Shareholders’ Equity
(1)
(2)

(3)
(4)

Number of shares authorized to be issued by the Company:
240,000,000 shares
Number of outstanding shares:
87,217,602 shares(including 598,803 shares of treasury stock)
Number of shareholders:
68,991
Major shareholders (Top 10)
Number of shares held
(shares)Name of shareholder

Percentage of shares
held (%)

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

12,883,900

14.87

Custody Bank of Japan, Ltd. (trust account)

4,135,900

4.77

Oki Denki Group Employees’ Shareholdings Committee

2,199,461

2.54

Custody Bank of Japan, Ltd. (trust account 4)

1,766,300

2.04

Mizuho Bank, Ltd.

1,419,648

1.64

Meiji Yasuda Life Insurance Company

1,400,097

1.62

DFA INTL SMALL CAP VALUE PORTFOLIO

1,275,760

1.47State Street Bank West Client-Treaty 505234

1,185,593

1.37

JP Morgan Chase Bank 385781

1,079,483

1.25

983,900

1.14

STATE STREET BANK AND TRUST COMPANY 505227

Note: The percentages of shares held are calculated after deducting treasury stock.

- 43 -

(Translation)
3.

Equity Warrants(1) Equity warrants granted to the Company’s officers as consideration for their performance of
duties(i) Number of equity warrants
903(ii) Type and number of shares subject to equity warrants
90,300 shares of the Company’s common stock (100 shares per equity warrant)(iii) Status of equity warrants held by the Company’s officers
Directors
Issued Number(Exercise Price)

FY2016 equity warrant (1 yen)
(Issued on August 16, 2016)
FY2017 equity warrant (1 yen)
(Issued on August 15, 2017)
FY2018 equity warrant (1 yen)
(Issued on August 14, 2018)
FY2019 equity warrant (1 yen)
(Issued on August 14, 2019)
FY2020 equity warrant (1 yen)
(Issued on August 18, 2020)

Exercise period(excluding Outside Directors)
Number ofequity warrants

Number ofholders

August 17, 2016 to August 16, 2041

125

3

August 16, 2017 to August 15, 2042

173

4

August 15, 2018 to August 14, 2043

183

4

August 15, 2019 to August 14, 2044

195

4

August 19, 2020 to August 18, 2045

2275(2) Equity warrants issued to employees in consideration of performance during the fiscal year underreview
No notes since no equity warrant was issued in this fiscal year.

- 44 -

(Translation)
4.

Company Officers(1) Names, etc. of Directors and Audit & Supervisory Board Members
Note 1

Position

Name

Status or main duties

X

Representative Director

Shinya Kamagami

Chief Executive Officer

X

President,
Representative Director

Takahiro Mori

Chief Operating Officer

X

Senior Executive Vice
President, Director

Masayuki Hoshi

Chief Compliance Officer
Chief Financial Officer
Chief Human Resource Officer

X

Senior Vice President
and Member of the
Board

Masashi Fuse

Head of Corporate GroupInternal Control Administrator
Chief Information Officer

X

Senior Vice President
and Member of theBoard

Masatoshi Saito

Head of Components & Platforms Business Group

Director

Shigeru Asaba

Outside Director, Nippon Beet Sugar Manufacturing Co.,
Ltd.
Advisor, IHI Corporation

Director

Tamotsu Saito

Outside Director, JAPAN POST INSURANCE Co., Ltd.
Outside Director, Furukawa Electric Co., Ltd.
Outside Director, KAJIMA CORPORATION

Director

Izumi Kawashima
Special Adviser, Yamato Holdings, Co., Ltd.

Director

Makoto Kigawa

Outside Director, Seven Bank, Ltd.
Outside Director, The Higo Bank, Ltd.
External Board Member, ICMG Co., Ltd.

Standing Audit & Supervisory
Board Member

Toshiya Hatakeyama

Standing Audit & Supervisory
Board Member

Toshiyuki Yokota

Audit & Supervisory Board
Member

Hideo Shiwa

External Director (Audit Committee Member),
OUTSOURCING Inc.

Audit & Supervisory Board
MemberRyuichi Makino

Standing Audit & Supervisory Board Member, Synchro
Food Co., Ltd.

Yoshihiro Tsuda

Outside Standing Audit & Supervisory Board Member,
Tribeck Inc.
Outside Audit & Supervisory Board Member, PRONEXUS
Inc.

Audit & Supervisory Board
MemberNotes:
1. X indicates Executive Officer.
2. Effective on April 1, 2023, Shinya Kamagami retired from the position of Representative Director and Chief Executive
Officer and assumed the position of Director and Chairman of the Board.
3. Masatoshi Saito resigned as Director effective March 31, 2023.
4. Directors Shigeru Asaba, Tamotsu Saito, Izumi Kawashima, and Makoto Kigawa are Outside Directors.
5. Audit & Supervisory Board Members Hideo Shiwa, Ryuichi Makino, and Yoshihiro Tsuda are Outside Audit &Supervisory Board Members.
6. Directors Shigeru Asaba, Tamotsu Saito, Izumi Kawashima, and Makoto Kigawa and Audit & Supervisory Board Members
Hideo Shiwa, Ryuichi Makino, and Yoshihiro Tsuda have been reported as independent officers to Tokyo Stock Exchange.
7. Audit & Supervisory Board Member Toshiya Hatakeyama has served in positions such as Officer in charge of the
Accounting & Control Division and Chief Financial Officer, and has extensive knowledge in finance and accounting.
8. Audit & Supervisory Board Member Hideo Shiwa headed the finance & accounting and planning divisions and presided
over a business company and unit of the head office of a manufacturing company, and has extensive knowledge in financeand accounting.
9. Audit & Supervisory Board Members Ryuichi Makino and Yoshihiro Tsuda are certified public accountants, and have

- 45 -

(Translation)
extensive knowledge in finance and accounting.
10. Executive officers as of March 31, 2023 are as follows (excluding those who concurrently serve as Directors).
Position

Name

Principal duty

Executive Vice President

Masashi Tsuboi

Digital Head, in Charge of Special Missions

Senior Vice President

Teiji Teramoto

Head of Marketing & Sales Group, Deputy Head of Components& Platforms Business Group, and Head of Business Collaboration
Division

Senior Vice President

Yuichiro Katagiri

Head of Solution Systems Business Group

Senior Executive Officer

Keizo Ikeda

Deputy Head of Corporate Group and Chief Quality Officer

Senior Executive Officer

Hiroshi Tomizawa

Deputy Head of Components & Platforms Business Group andGeneral Manager of Automation Systems Division

Senior Executive Officer

Hajime Maruo

Deputy Head of Marketing & Sales Group and Head of Marketing& Sales Division-2, Marketing & Sales Group

Senior Executive Officer

Tetsuya Takimoto

Deputy Head of Marketing & Sales Group and Head of Marketing& Sales Division-1, Marketing & Sales Group

Executive Officer

Shuutarou Ootahara

Deputy Head of Corporate Group and Head of Corporate
Communication Division

Executive Officer

Hiroshi Nishimura

Head of Electronics Manufacturing Services Division,Components & Platforms Business Group

Executive Officer

Yoichi Katou

Deputy Head of Solution Systems Business Group and Head of
TOKKI Systems Division

Executive Officer

Yuhiko Fujiwara

Chief Innovation Officer, Chief Technology Officer

Executive Officer

Takashi Inoue

General Manager of Peripheral Products Division, Components &Platforms Business Group

Executive Officer

Toru Hattanda

General Manager of Human Resources & General Affairs
Division, Corporate Group

Executive Officer

Hajime Inoue

Deputy Head of Solution Systems Business Group and General
Manager of Social Infrastructure Solutions Division

Executive Officer

Takashi Itou

General Manager of Corporate Planning Division, CorporateGroup

Executive Officer

Shotaro Nakatsu

Deputy Head of Solution Systems Business Group and General
Manager of Financial & Enterprise Solutions Division(2) Outline of liability limitation agreements
The Company concluded agreements to limit liabilities with all Outside Directors and Audit &Supervisory Board Members under the provisions of Article 427, paragraph (1) of the Companies Act.
The outline of the agreements is as follows: In cases where Outside Directors and Audit & Supervisory Board Members are liable for any
damages arising from their negligence to the Company, they shall compensate for such damages
only to the extent of the minimum liabilities as stipulated in laws and regulations.
 The above limitation of liability shall be applied only when the relevant Outside Directors andAudit & Supervisory Board Members have executed their duties that caused the liabilities in goodfaith and without gross negligence.
(3) Outline of liability insurance agreement for Directors
The Company concluded liability insurance agreements as defined in the provisions of Article 4303, paragraph (1) of the Companies Act covering Directors, Audit & Supervisory Board Members,
Executive Officers, and those who concurrently serve as Outside Directors, etc. of the Company (plan to- 46 -

(Translation)
add Executive General Managers as insured from the next renewal in FY2023); Directors, Executive
Officers, Audit & Supervisory Board Members and Corporate Officers of all of the domestic subsidiaries;
and Directors, Executive Officers, Audit & Supervisory Board Members, Corporate Officers andemployees who hold executive positions at some foreign subsidiaries in the U.S., China, Thailand, etc.
as the insured. The Company or a subsidiary bears the full amount of premium including riders, andthe insured has no burden to pay the premium. The insurance agreement compensates for damage
which may be incurred when the insured has responsibility to execute duties or receives a claim related
to the pursuit of responsibility. However, it determines certain reasons for exceptions such as damage
that arises due to an act conducted while realizing it breaches laws and regulations. In addition, theinsurance agreement defines the scope of deductibles, and the damage up to the deductibles will not becompensated for by the insurance. In this way, by defining the provisions on the reasons for exceptions
and deductibles, the Company intends not to impair the adequacy of the duties of Directors, etc.

- 47 -

(Translation)(4) Compensation, etc. paid to Directors and Audit & Supervisory Board Members in the fiscal year
under review(i)

Policy on determining the content of individual compensation, etc. for Directors
The Company established the policy on determining the content of individual compensation,etc. for Directors, and a summary is as follows.
・Basic policy
OKI’s basic policy on compensation for directors and executive officers is to serve as
incentives for the performance improvement with the aim of the continuous enhancement of thecorporate value and enforcement of the corporate competitiveness while being the compensation
structure that can attract excellent human resources.
・Structure of compensation
The compensation structure is divided into performance-linked compensation andcompensation other than performance-linked compensation, and consists of basic compensation,
which is a fixed compensation; and annual incentive compensation and medium- to long-term
incentive compensation, which are performance-linked compensation. These compensations
have been provided as part of efforts to develop an environment for a shift to the management
focused on “more aggressive goal setting” and “growth over medium- to long-term” in order toachieve “continuous growth” of the OKI Group. The compensation for outside directors consists
only of basic compensation.
Basic compensation

Annual incentive

Medium- to long-term
incentive

Inside Directors(Concurrently serving as
Executive Officer)

〇

〇

〇

Outside Directors

〇

-

-

As medium- to long-term incentive compensation, the Company provided compensationtype stock options until FY2022. If Proposal No. 4 of this General Meeting of Shareholders isapproved, performance-linked stock compensation (performance share units) will be provided fromFY2023, in which shares will be delivered in proportion to the achievement of the performance ofthe Medium-Term Business Plan (three years).

- 48 -

(Translation)
・Content of compensation
Content of compensation is as shown in the table below.

Basiccompensation

Type

Content of compensation

Fixed
compensation

・ When serving as Executive Officer concurrently, monetarycompensation shall be determined and paid monthly while
being individually tailored to the position, followed by duties.
・ Once a year, monetary compensation shall be paid anddetermined individually with a linkage with the single year’s
consolidated business performance of the OKI Group and thatof the division each Director is responsible for.
Monetary
compensation

Annualincentivecompensation

・ Until fiscal 2022, the rate of payment is determined within ascope of 0% to 200%, according to linkage with thequantitative assessment by business performance andqualitative assessment by the President or the Personnel
Affairs and Compensation Advisory Committee. The range
will be determined between 0 and 250% from FY2023.
・ It is set that the degree of linkage with business performanceis higher for a person in a higher position. The amount of
payment is set to 35% to 45% of the basic compensation when
the rate of payment is 100%.
・ The amount of payment linked to the Medium- Term Business
Plan is determined. Until fiscal 2022, it is paid ascompensation-type stock option once a year.

Performancelinked
compensation

Medium- tolong-term
incentivecompensation

Nonmonetarycompensation

・ If Proposal No. 4 of this General Meeting of Shareholders isapproved, performance-linked stock compensation(performance share units) will be provided from FY2023.
The performance share units will be granted for the
performance evaluation period of three years, which is theperiod of the Medium-Term Business Plan, and shares will bedelivered after the evaluation period in accordance with thedegree of achievement of the Medium-Term Business Plan
(however, a portion of the shares to be delivered will be paidin cash).
・ The rate of payment will be determined within the scope of 0
to 200% until FY2022, depending on the degree ofachievement of the targets. The range will be determined
between 0 and 250% from FY2023.
・ It is set that the degree of linkage with business performanceis higher for a person in a higher position. The amount of
payment is set to 15% to 20% of the basic compensation when
the rate of payment is 100%.
・ In the event that the Board of Directors recognizes that a
director, etc. has violated laws or regulations, etc. in amaterial respect, the right to receive delivery of shares will be
forfeited (clawback provision)

Calculation method for performance-linked compensation
・ FY2022
For annual incentive compensation, 70% of the amount to be paid is calculated bymultiplying the standard compensation amount set for each position in advance multiplied by aperformance evaluation factor based on quantitative evaluation, and 30% is calculated byqualitative evaluation in accordance with (iii). The performance indicators used in thequantitative evaluation are those (sales, operating income, and working capital) that have been
- 49 -

(Translation)
determined to be appropriate as performance evaluation indicators for achieving the OKI Group’s
sustainable growth. The quantitative evaluation consists of the OKI Group’s consolidated
performance-linked portion and the performance-linked portion by the division in charge, and thetarget and actual results of the performance evaluation indicators for the OKI Group’s consolidated
performance-linked portion are as follows.
(Unit: Billions of yen)
Performance evaluation indicator

Targets

Actual results

Net sales

425.0

369.1

Operating income

9.0

2.4

Working capital

95.2

103.5

The amount (or quantity) of the medium- to long-term incentive compensation is based on
ROE as a performance indicator, which is judged to be an appropriate indicator for improving
corporate and shareholder’s value over the medium and long term and share with shareholders.
To calculate the amount, the Company sets the standard compensation amount for each position inadvance, then multiplies it by a performance evaluation factor. The targets and actual results are
as follows.

Performance evaluation indicator

Targets

ROE

Actual result
10%(2.7%)

・ FY2023
Annual incentive compensation will be changed to 80% quantitative evaluation and 20%
qualitative evaluation to increase transparency.
For medium- and long-term incentive compensation, we will place more emphasis on
medium- and long-term growth, and add sales and ESG-related indicators to the performance
evaluation indexes in order to improve linkage with the Medium-Term Business Plan.
・Compensation decision process
As for how to determine the policy on determining individual compensation, etc. for
Directors, in order to secure transparency and objectiveness in the decision-making processes
concerning compensation for officers, the Company has established the Personnel Affairs andCompensation Advisory Committee, which consists of only Outside Directors. It deliberates,
prior to resolutions at a Board of Directors meeting, on the structure and level of compensation for
directors and executive officers, and reports the results to the Board of Directors. In addition, theappropriateness of the structure and level of compensation is validated mainly utilizing objective
evaluation data from external organizations.
The Personnel Affairs and Compensation Advisory Committee held a total of 12 meetings
during the fiscal year under review, discussed the compensation structure for officers in six of thesemeetings, and reported the results three times.
Since the Board of Directors decided the content of individual compensation, etc. for- 50 -

(Translation)
Directors for the fiscal year under review after confirming the content of the report, it was evaluatedthat the content of the individual compensation, etc. for Directors for the fiscal year under review
complied with the policy above.
(ii)

Matters related to the resolution for the compensation, etc. for Directors and Audit & Supervisory
Board Members of the ordinary general meeting of shareholders
As for the amount of monetary compensation for Directors, at the 82nd ordinary general
meeting of shareholders held on June 29, 2006, it was resolved that the annual amount for Directors
would be ¥600 million or less (not including employee salary for an employee who is serving as
Director). The number of Directors at the end of the ordinary general meeting of shareholders
was eleven (including one outside director).
Separately from the monetary compensation, at the 92nd ordinary general meeting ofshareholders held on June 24, 2016 and the 97th ordinary general meeting of shareholders held on
June 29, 2021, it was resolved that the compensation-type stock option for Directors excluding
outside directors would be ¥100 million or less per year. The number of Directors at the end of
the ordinary general meetings of shareholders was five (excluding outside director), respectively.
The introduction of performance-linked stock compensation (performance share units) has been
submitted as Proposal No. 4 at this General Meeting of Shareholders.
As for the amount of monetary compensation for Audit & Supervisory Board Members, atthe 82nd ordinary general meeting of shareholders held on June 29, 2006, it was resolved that it
would be ¥100 million or less per year. The number of Audit & Supervisory Board Members at
the end of the ordinary general meeting of shareholders was four.

(iii) Matters related to the commission of the decision on the content of individual compensation, etc.
for Directors
The Company commissions the decision on the specific content of individual remuneration
related to annual incentive compensation for Directors based on a resolution for the commission of
the Board of Directors as below. As for the part commissioned to a Director who is concurrently
serving as President and Executive Officer, the Company has taken measures such as deliberating
the validation at the Personnel Affairs and Compensation Advisory Committee to ensure that the
Director adequately executes his/her authority.

Note:

Applicable Directors

Commissioned person

Director concurrently
serving as the
Chairman andExecutive Officer or
the President andExecutive Officer

Members of the
Personnel Affairs andCompensation Advisory
Committee (Directors
Shigeru Asaba,
Tamotsu Saito, Izumi
Kawashima, and
Makoto Kigawa)

Executive Director
other than the above

Director concurrently
serving as the President
and Executive Officer(Director Takahiro
Mori)

Content of thecommissioned
authority

Qualitative evaluationfor 30% of annual
incentivecompensation

Reason for the commission of theauthority

To secure transparency of theprocess and objectivity ofevaluation

To focus on aggressive goal-setting
for each task assigned to the person

From FY2023, the portion of compensation that is subject to qualitative evaluation will be changed to 20%.

- 51 -

(Translation)(iv) Compensation paid to Directors and Audit & Supervisory Board Members, etc.
Amount of payment by type of compensation
Fixed
Performance-linked compensationcompensation
Non-monetary
Monetary compensationcompensation
Basic
Medium- to longAnnual incentive
compensation
term incentive

Officer Title

Amount ofpayment

Number ofapplicable officers

Directors(excluding Outside
Directors)¥238 million¥212 million¥25 million－

6

Audit &
Supervisory Board
Members(excluding Outside
Audit &
Supervisory Board
Members)¥46 million¥46 million

－

－

2

Outside officers
Outside Directors
Outside Audit &Supervisory
Board Members¥55 million¥55 million–¥27 million¥27 million

–

–
–

4
3

Notes:
1.
The medium- to long-term incentive compensation is non-monetary compensation, etc. Its content is stated in(i) above.
2.
The numbers of Directors (excluding Outside Directors) as of the end of the fiscal year under review are different
from the number shown above, and the above numbers include those who retired at the conclusion of the 98th
Ordinary General Meeting of Shareholders held on June 29, 2022.

(5) Outside Directors and Audit & Supervisory Board Members(i)Status of material concurrent positions at other organizations, etc. and the Company’s relationshipwith the aforesaid organizations
EntityShigeru Asaba,
Director

Nippon Beet Sugar
Manufacturing Co.,Ltd.

IHI Corporation

Tamotsu Saito,
Director

JAPAN
POST
INSURANCE Co.,Ltd.
Furukawa ElectricCo., Ltd.

KAJIMA
CORPORATION

Position/responsibilities
at the entity
Outside Director

AdvisorOutside Director

Outside Director

Outside Director- 52 -

Category

Business relationship

ListedThere are no business relationships
between Nippon Beet Sugar
Manufacturing Co., Ltd. and OKI
Group.

ListedThe volume of transactions between
IHI Corporation and OKI Groupaccounts for less than 1% of eachcompany’s net sales.

ListedThe volume of transactions between
JAPAN POST INSURANCE Co., Ltd.
and OKI Group accounts for less than
1% of each company’s net sales.

ListedThe volume of transactions between
Furukawa Electric Co., Ltd. and OKI
Group accounts for less than 1% ofeach company’s net sales.

ListedThe volume of transactions between
KAJIMA CORPORATION and OKI
Group accounts for less than 1% ofeach company’s net sales.

(Translation)

Yamato Holdings,
Co., Ltd.

Special Adviser

ListedThe volume of transactions between
Yamato Holdings, Co., Ltd. and OKI
Group accounts for less than 1% ofeach company’s net sales.

Seven Bank, Ltd.

Outside Director

ListedThere are no business relationships
between Seven Bank, Ltd. and OKI
Group.

Outside Director

Unlisted

The volume of transactions between
The Higo Bank, Ltd. and OKI Groupaccounts for less than 1% of eachcompany’s net sales.

ICMG Co., Ltd.

External Board
MemberUnlisted

There are no business relationships
between ICMG Co., Ltd. and OKI
Group.

Hideo Shiwa,
Audit &
Supervisory Board
MemberOUTSOURCINGInc.

External Director(Audit Committee
Member)ListedThe volume of transactions between
OUTSOURCING Inc. and OKI Groupaccounts for less than 1% of eachcompany’s net sales.

Ryuichi Makino,
Audit &
Supervisory Board
MemberSynchro Food Co.,
Ltd.

Standing Audit &Supervisory Board
MemberListedThere are no business relationships
between Synchro Food Co., Ltd. and
OKI Group.

Outside Standing Audit& Supervisory Board
MemberUnlisted

There are no business relationships
between Tribeck Inc. and the OKI
Group.

ListedThe volume of transactions between
PRONEXUS Inc. and OKI Groupaccounts for less than 1% of eachcompany’s net sales.

Makoto Kigawa,Director
The HigoLtd.

Yoshihiro Tsuda
Audit &
Supervisory Board
MemberBank,

Tribeck Inc.

PRONEXUS Inc.

Outside Audit &Supervisory Board
Members- 53 -

(Translation)(ii)

Major activities in the fiscal year under review(a) Attendance at meetings of the Board of Directors, the Audit & Supervisory Board, and the
Personnel Affairs and Compensation Advisory Committee
Board of Directors meeting(number of meetings inparenthesis)

Audit & Supervisory
Board meeting(number of meetings inparenthesis)

Personnel Affairs andCompensation Advisory
Committee(number of meetings inparenthesis)

Attendance
frequency

Attendance
rate

Attendance
frequency

Attendance
rate

Attendance
frequency

Attendance
rate

Shigeru Asaba,
Director

13(13)

100%--

12(12)

100%

Tamotsu Saito,
Director

13(13)

100%--

12(12)

100%

Izumi Kawashima,
Director

13(13)

100%--

12(12)

100%

Makoto Kigawa,Director

12(13)

92%--

12(12)

100%

Hideo Shiwa,
Audit &
Supervisory Board
Member13(13)

100%

18(18)

100%--

Ryuichi Makino,
Audit &
Supervisory Board
Member13(13)

100%

18(18)

100%--

Yoshihiro Tsuda
Audit &
Supervisory Board
Member13(13)

100%

18(18)

100%--- 54 -

(Translation)(b) Major activities
Principal comments at the Board of the Directors and summary of the duties executed for the role
expected of outside director

Shigeru Asaba,
Director

He provided advice and made proposals for the appropriateness and properness of decision making by
the Board of Directors. He also contributed to strengthening compliance by providing a good example
to managerial personnel through his leadership and enhancing the management fairness and transparency
as the Chairperson of the Personnel Affairs and Compensation Advisory Committee. He has
contributed to the improvement of the Company’s corporate value by fulfilling his expected role, inparticular by actively giving advice and making proposals based on his academic expertise in all aspectsof business, including marketing and innovation, in order to deepen the deliberations of the Board of
Directors on the Medium-Term Business Plan 2025.

Tamotsu Saito,
Director

He provided advice and made proposals for the appropriateness and properness of decision making by
the Board of Directors. He also contributed to strengthening compliance by providing a good example
to managerial personnel through his leadership and enhancing the management fairness and transparency
as a member of the Personnel Affairs and Compensation Advisory Committee. He has contributed tothe improvement of the Company’s corporate value by fulfilling his expected role, in particular byactively giving advice and making proposals based on his experience in manufacturing, development,
and global management, in order to deepen the deliberations of the Board of Directors on the MediumTerm Business Plan 2025.

Izumi Kawashima,
Director

She led discussions by the Board of Directors as its chairperson, and provided advice and made proposals
for the appropriateness and properness of decision making by the Board of Directors. She also
contributed to strengthening compliance by providing a good example to managerial personnel throughher leadership and enhancing the management fairness and transparency as a member of the Personnel
Affairs and Compensation Advisory Committee. She has contributed to the improvement of theCompany’s corporate value by fulfilling her expected role, in particular by actively giving advice andmaking proposals based on her knowledge as a legal expert of the Companies Act, Financial Instruments
and Exchange Act, etc. in order to deepen the deliberations of the Board of Directors on the MediumTerm Business Plan 2025.

Makoto Kigawa,Director

He provided advice and made proposals for the appropriateness and properness of decision making by
the Board of Directors. He also contributed to strengthening compliance by providing a good example
to managerial personnel through his leadership and enhancing the management fairness and transparency
as a member of the Personnel Affairs and Compensation Advisory Committee. He has contributed tothe improvement of the Company’s corporate value by fulfilling his expected role, in particular byactively giving advice and making proposals based on his management experience in supply chain
management and risk management in order to deepen the deliberations of the Board of Directors on theMedium-Term Business Plan 2025.

Hideo Shiwa,
Audit &
Supervisory Board
Member

He audited the business execution of Directors and leveraged his extensive experience and knowledge
as an executive and a Director at a manufacturing company to make statements aimed at achieving
sustainable growth and producing medium- to long-term corporate value for the Company.

Ryuichi Makino,
Audit &
Supervisory Board
Member

He audited the business execution of Directors, and leveraged his extensive experience and knowledge
concerning accounting audit on companies centered on manufacturers as a certified public accountant tomake statements aimed at achieving sustainable growth and establishing high-quality corporate
governance systems for the Company.

Yoshihiro Tsuda
Audit & Supervisory Board
Member

He audited the business execution of Directors, and leveraged his extensive experience and knowledge
concerning accounting audit on companies operating globally as a certified public accountant to makestatements aimed at achieving sustainable growth and establishing high-quality corporate governancesystems for the Company.

- 55 -

(Translation)
5.

Status of Accounting Auditor(1) Name: PricewaterhouseCoopers Aarata LLC(2) Policy and reason for the appointment
The Company has appointed the accounting auditor with comprehensive consideration by assessing
indicators, such as the quality control scheme, independence, auditing scheme, and estimatedcompensation for auditing services.
(3) Policy regarding decision to dismiss or not reappoint
The Audit & Supervisory Board, in principle, will determine the detail of the proposal to besubmitted to the general meeting of shareholders regarding dismissal or non-reappointment of theaccounting auditor if it is deemed unlikely that the accounting auditor will be able to perform audits
properly. In addition, if the accounting auditor falls under provisions of the items in Article 340,
paragraph (1) of the Companies Act, the Audit & Supervisory Board will dismiss the accounting auditor
upon the consent of all the Audit & Supervisory Board Members.
(4) Assessment of the audit corporation by Audit & Supervisory Board members and the Audit &Supervisory Board
The Audit & Supervisory Board members and the Audit & Supervisory Board of the Company
assess the audit corporation. The assessment is comprehensive based on indicators, such as the audit
corporation’s quality control scheme, independence, auditing scheme, group auditing scheme, andestimated compensation for auditing services.
(5) Contents, etc. of compensation for auditing services(i) Compensation, etc.
Previous fiscal year

Fiscal year under review

Compensation foraudit attestation
services(millions of yen)Compensation for
non-auditing
services(millions of yen)Compensation foraudit attestation
services(millions of yen)Compensation for
non-auditing
services(millions of yen)

Oki ElectricIndustry

253

–

259

3

Consolidated
subsidiaries

82

–

82

–

Total

335

–

341

3

Category

Notes:
1. The Company does not distinguish between auditor compensation regarding (i) auditing in accordance with the Companies
Act, and (ii) auditing in accordance with the Financial Instruments and Exchange Act. The total of these amounts isrecorded above.
2. Among our major subsidiaries, Oki Data Manufacturing (Thailand) Co., Ltd. and Oki Europe Ltd. have undergone statutory
audits by accounting auditors other than the accounting auditor of the Company.

- 56 -

(Translation)(ii) Content of non-auditing services(Previous fiscal year)
Not applicable.
(Fiscal year under review)
The Company has entrusted the accounting auditor with “procedures for securitization ofreceivables” and other services, which are services other than the audits specified in Article 2, paragraph(1) of the Certified Public Accountants Act, and pays the auditor compensation for the services.
(iii) Policy regarding determination of compensation for auditing services
The Company has no particular rules or regulations regarding decisions on compensation forauditing services to the audit corporation but has determined the compensation after having fully
considered the audit plan, etc. of the audit corporation and verified the validity of the time, contents, etc.
of the auditing services(iv) Reason for the Audit & Supervisory Board to consent to compensation for accounting auditor
The Audit & Supervisory Board has decided to consent to the compensation to be paid to theaccounting auditor proposed by the Board of Directors in accordance with Article 399, paragraph (1) of
the Companies Act. This is because it has performed necessary verification as to the appropriatenessof matters such as the content of the accounting auditor’s audit plan, the status of performance of duties
by the accounting auditor, and the basis for calculating the estimated compensation for the accounting
auditor, and has found them appropriate.

- 57 -

(Translation)
6.

Policies and procedures of the Company(1) Procedures to ensure that Directors and employees comply with applicable laws, regulations andthe Articles of Incorporation in conducting their business and other systems to ensure appropriate
operations
The Company’s Board of Directors has adopted a resolution on the Basic Policy for the
Establishment of an Internal Control System in accordance with the Companies Act, and confirms thestatus of establishment and operation of the internal control system at the end of each fiscal year, andreports the results to the Board of Directors. The details of the resolution on the basic policy as of theend of the current fiscal year are as follows.
[Basic Policy for the Establishment of an Internal Control System]
In accordance with the Companies Act and the Regulations for Enforcement of the Companies Act,
the Company has established the following basic policy regarding internal control, and will establish,
operate, and continuously improve an internal control system based on this basic policy, with the aim ofcontributing to the sustainable development of society through the voluntary and autonomous
achievement of goals and the enhancement of corporate value.
(i)

Procedures to ensure that Directors and employees comply with applicable laws, regulations andthe Articles of Incorporation in conducting their business(a) Directors and Executive Officers shall take the initiative in setting an example of the OKI
Group Charter of Corporate Conduct and the OKI Group Code of Conduct, which were
established to establish corporate ethics in the Company and its subsidiaries (hereinafter “OKIGroup”) and to ensure compliance with laws, the Articles of Incorporation, and internal
regulations by Directors, Executive Officers, and other employees, and shall repeatedly
communicate and disseminate the importance of compliance with these codes.
(b) The Company has established a Compliance Committee chaired by the Chief Compliance
Officer to report, deliberate, and decide on matters related to compliance in the OKI Group.
(c) Based on the decisions formulated by the Compliance Committee, the division responsible forcompliance plans, draws up, and promotes specific measures such as education and training
for Directors, Executive Officers, and employees in order to raise awareness of complianceamong all OKI Group personnel.
(d) Violations of laws, regulations, the Articles of Incorporation, etc. shall be strictly punished inaccordance with disciplinary regulations.
(e) The OKI Group’s compliance with laws, the Articles of Incorporation, and internal regulations
shall be audited by an independent internal audit department under the direct control of the
President, and problems shall be pointed out and remedial measures shall be proposed.
(f) The Company establishes whistle-blowing regulations which enable reporting to Outside
Directors and Audit & Supervisory Board Members and provides a contact point for reportingand consultation, aiming to detect any misconduct at its earliest stages and make
improvements.
(g) The Company stands firmly against antisocial groups that threaten the order and safety of civilsociety in cooperation with the police and related organizations, and refuses to have any
relationship with them as a whole.

(ii)

Procedures to retain and manage information relating to Directors’ conduct of business- 58 -

(Translation)(a) The Company retains and manages documents and information relating to the conduct ofbusiness by Directors as appropriate in accordance with applicable laws, regulations andinternal rules.
(b) With respect to information security, the OKI Group shall clarify its responsibility for
information security in accordance with rules for electronic information management andrelated regulations, and establish a system to continuously implement measures to maintainand improve information security in the OKI Group.
(c) The Company shall establish regulations related to personal information protection and trade
secret management, and appropriately and safely store and manage personal information andimportant trade secrets.
(d) The Company shall establish rules related to the disclosure of important corporate information,and put in place a system to ensure the appropriate, timely, and fair disclosure of information
to be disclosed in accordance with the requirements of laws, regulations, or the rules andregulations of the stock exchange.
(iii) Rules concerning risk management and other procedures(a) For risk management, the Company shall establish a Risk Management Committee chaired by
the President and Executive Officer pursuant to risk management rules for appropriately
grasping risks that may occur in relation to business activities of the OKI Group andpreventing such risks from emerging.
(b) Pursuant to risk management rules, each section of the OKI Group manages risks that may
occur in relation to its main duties. At the same time, the Company has established asupervisory section to deal with risks needing company-wide management. This section
assesses risks, draws up policies for risk countermeasures and develops appropriate structures
based on such policies.
(c) In the event that the OKI Group recognizes the occurrence or signs of a crisis, etc., it shallpromptly report the situation to the Risk Management Committee. The Committee shall give
instructions on how to respond, and report particularly important matters to the Directors andAudit & Supervisory Board Members. In the event of a disaster, etc., the Company shall
respond by establishing an emergency countermeasure headquarters, taking into consideration
the area of occurrence, the scale of the disaster, and other relevant factors.
(d) The Board of Directors shall also review the risk management system annually.
(iv) Procedures to secure efficient business performance by Directors(a) The Company holds regular meetings of the Board of Directors once a month in principle todecide important matters including basic management policies and supervise the businessexecution of Directors.
(b) The Company appoints Executive Officers to execute business based on basic management
policies determined by the Board of Directors so as to separate the functions of businessexecution and supervision, and promote timely decision-making processes. In addition, theCompany holds meetings of the Management Committee consisting of Executive Officers, etc.
to assist the President in making decisions.
(c) The Company assigns Directors responsibilities and authority pursuant to rules on division ofduties and authorities.
(d) The Board of Directors shall determine the OKI Group’s Medium-Term Business Plan andannual plan, and supervise the execution thereof.
- 59 -

(Translation)(e) Executive Officers shall efficiently execute their duties in accordance with the OKI Group’s
Medium-Term Business Plan and annual plan determined by the Board of Directors, and theprogress of the annual plan shall be confirmed by the Management Committee and reported
to the Board of Directors.
(v)

Procedures to secure appropriate Group (Company and subsidiaries) operations(a) Provide guidance and support to subsidiaries with respect to the procedures to secure
appropriate their operations.
(b) In order to improve the soundness and efficiency of management within the OKI Group,
Directors and Audit & Supervisory Board Members shall be dispatched to each subsidiary as
necessary in accordance with the Subsidiaries and Affiliates Management Rules, and an
administrative division within the Company shall be designated to receive reports from anddiscuss important matters concerning the business operations of the subsidiary. In addition,
particularly important matters shall be submitted to the Company’s Management Committeeor the Board of Directors.
(c) Each subsidiary establishes whistle-blowing regulations that enable reporting to their Outside
Directors and Audit & Supervisory Board Members, provides a contact point for reporting andconsultation, and aims to detect any misconduct at its earliest stages and make improvements
after reporting to the Company.
(d) The Company shall establish various rules and regulations to be complied with by the Groupas the Group’s common rules, in order to improve the efficiency of each company’s decisionmaking and business operations.
(e) The internal audit section of the Company shall audit the appropriateness of the OKI Group’s
operations and provide verification, advice, etc.

(vi) System to ensure the reliability of financial reporting(a) In order to secure the reliability of the OKI Group’s financial reporting, the Company shallestablish, maintain, and improve an internal control system for financial reporting inaccordance with the Corporate Calculation Regulations, the Financial Instruments andExchange Act, and other applicable laws and regulations.
(b) Each section of the Company and its subsidiaries shall endeavor to ensure the appropriatenessof financial reporting by implementing checks and balances through segregation of duties anddaily monitoring in the execution of their own duties.
(vii) Matters concerning employees assisting Audit & Supervisory Board Members and independenceof such employees from Directors(a) The Company assigns employees as staff to assist Audit & Supervisory Board Members.
(b) The Company assigns employees, who are not subject to Directors’ instructions and orders, as
staff to assist Audit & Supervisory Board Members, and any reassignment and evaluation ofsuch employees requires the prior consent of the Audit & Supervisory Board.
(viii) Procedures for Directors and employees to report to Audit & Supervisory Board Members;
procedures for Audit & Supervisory Board Members to receive other reports(a) If any Director or employee, or any Director, Audit & Supervisory Board Member, or employee
of a subsidiary discovers any fact that may cause significant damage to the Company, they are
required to immediately report it to the Audit & Supervisory Board Members, either directly- 60 -

(Translation)or through the administrative division, pursuant to applicable laws and regulations.
(b) In addition to the Board of Directors meetings, Directors shall ensure that Standing Audit &Supervisory Board Members have opportunities to attend management meetings and haveaccess to important documents such as approval documents so that Audit & Supervisory Board
Members can grasp the process of important decision-making and the status of businessexecution.
(c) Directors shall establish a system to enable Audit & Supervisory Board Members to attend andreceive reports from the Risk Management Committee.
(d) Directors shall ensure that Audit & Supervisory Board Members receive whistle-blowing
reports based on whistle-blowing regulations, and that a system is in place to report to Audit& Supervisory Board Members on the status of internal reporting.
(e) Directors shall ensure a system to regularly report to Audit & Supervisory Board Members on
the status of establishment and operation of the internal control system and the status of internal
audits, and to request reports from Directors and employees on matters deemed necessary by
the Audit & Supervisory Board Members.
(f) The Company ensures that a person who made a whistle-blowing report to Audit & Supervisory
Board Members will not be treated unfavorably on account of making such report.
(g) Directors and employees of subsidiaries shall promptly report to the Audit & Supervisory
Board Members of subsidiaries on matters for which they are requested to report by the Audit& Supervisory Board Members of subsidiaries, in addition to matters required by laws,
regulations, and rules, and shall report to the administrative division in charge of thesubsidiaries of the Company.
(ix) Other procedures to secure effective audits by Audit & Supervisory Board Members(a) In conducting inspections on the Company’s operations and assets and performing other audit
duties, Audit & Supervisory Board Members shall conduct audits efficiently and effectively inclose cooperation with the internal audit section.
(b) Audit & Supervisory Board Members implement efficient audits by closely cooperating withthe accounting auditor. To this end, Audit & Supervisory Board Members hold meetings withthe accounting auditor on a regular basis, attend on-site audits by the accounting auditor, andrequest reports from the accounting auditor on the progress of audits when necessary.
(c) The Company pays all the expenses necessary for the execution of the duties of Audit &Supervisory Board Members.
(d) When deemed necessary in conducting audits, Audit & Supervisory Board Members may, at
the Company’s expense, obtain advice on audit work from attorneys, certified public
accountants, and other professionals.

(2) Overview of Status of Operations
The following is a summary of the status of operation of the internal control system at the Company.
The status of such operation is evaluated at the end of each fiscal year, and the results are reported at a
meeting of the Board of Directors.
(i) Status of procedures relating to compliance(a) As a basis for ensuring compliance, the OKI Group Charter of Corporate Conduct, whichclearly states the social responsibilities that the OKI Group must fulfill based on its corporate- 61 -

(Translation)philosophy, and the OKI Group Code of Conduct, which serves as a code to which all OKI
Group officers and employees must conform in order to realize these responsibilities, havebeen established. In addition, the management team, having re-affirmed the importance ofcompliance, takes the initiative in compliance activities, and officers of the Company andGroup companies are working on compliance activities in conformance with the Compliance
Commitment. The Company has established this commitment to reassure shareholders,customers, employees and all other stakeholders within and outside the Company that it strives
to foster awareness of compliance and makes a thorough commitment to compliancethroughout the OKI Group.
(b) The Compliance Committee, chaired by the Chief Compliance Manager, held meetings twicea year, where it summarized activities in the previous fiscal year, formulated education plans,
and reviewed the status of implementation of various measures in individual sections.
(c) The Company held group training such as training sessions for compliance managers, in which
compliance managers and promoters of the OKI Group participated, and training sessions on
the Anti-Monopoly Act for officers and employees chiefly in the Market & Sales Section. It
also conducted e-learning on personal information protection, information security, internal
control and general compliance-related topics for all employees in Japan. The Company also
regularly presents case studies on compliance on the intranet and internal publications.
(d) The Company clearly has defined that in case of non-compliance, the Company takes
disciplinary action in accordance with the workplace regulations, etc., and has the Group
Disciplinary Action Committee, which is chaired by the President and Executive Officer, toconsider said action.
(e) The Company has established a whistle-blower system that allows employees to directly report
improper conduct and ensure that all employees are aware of the system to ensure quick
discovery and effective correction of improper conduct.
(f) The internal audit section conducts operational audits of the Group and evaluates internal
controls over financial reporting to ensure the effectiveness and efficiency of operations andthe reliability of financial reporting.
(ii) Status of procedures relating to risk management(a) In accordance with the Risk Management Regulations, the OKI Group has established a Risk
Management Committee chaired by the President and Chief Executive Officer and advised by
the Audit & Supervisory Board Members, to develop measures to prevent risks frommaterializing and a system to prepare for the occurrence of risks.
(b) The OKI Group’s risk management system categorizes risks that exist within the Group anddefines them as risk areas to cover the entire Group, and the department responsible for therisk area provides support, guidance, and advice, etc. to each department and subsidiary
regarding events that occur in the area. In addition, the department responsible for the risk
area handles risks that are common to the OKI Group and require focused management incooperation with the department responsible for the risk area.
(c) If any risk materializes, the department in which it arises takes the necessary steps for the risk,
and promptly reports the details of the event to the Risk Management Committee according to
the OKI Group Emergency Response System. This Committee manages crisis information
in a unified manner, determines a response system and manager promptly, giving consideration
to the severity and urgency of the said crisis, implements necessary measures, and gives
support to the said department.
- 62 -

(Translation)(iii) Status of procedures relating to subsidiary management(a) The head of administrative division of each subsidiary designated in the Subsidiaries andAffiliates Management Rules manages it with the authority and responsibilities stipulated by
the authority regulations. Appointment and dismissal of chief officers of subsidiaries isdetermined by the President and Executive Officer of the Company, and appointment anddismissal of other officers is determined by the head of the administrative division.
(b) Heads of administrative divisions clearly state the missions of subsidiaries which theysupervise, and when developing business plans, they provide support, instruction, and periodic
monitoring, and evaluate the performance of officers. Heads of administrative divisions also
monitor the operational status of the general meeting of shareholders and the Board of
Directors and compliance of Directors of subsidiaries.
(c) At the accounting division of each subsidiary, the Company has appointed staff with thenecessary knowledge and experience. The Company works to conduct the maintenance andimprovement of an internal control system for financial reporting conducted in accordancewith related laws and regulations.
(d) To prevent losses from violations, misconduct, scandals, or accidents related to any laws, rules
or ethics, or loss from failing to appropriately perform risk management, the Company holds
regular training seminars for directors and audit & supervisory board members of subsidiaries.
Seminar topics include responsibilities and obligations as a subsidiaries’ officer, compliance,
and internal controls.
(iv) Status of procedures to ensure appropriateness of audits by Audit & Supervisory Board Members(a) One staff member independent from the execution of duties is assigned to assist Audit &Supervisory Board Members in their duties. The Standing Audit & Supervisory Board
Members assess important decision-making processes and the status of business operations byattending meetings of the Board of Directors and the Management Committee in addition toreading resolution approval documents.
(b) The Audit & Supervisory Board Members have received whistle-blowing reports based onwhistle-blowing regulations, and frequently received detailed reports on the status of operation.
(c) In addition to receiving reports on the development and operational status of the internal
control system at the meetings of the Board of Directors, the Audit & Supervisory Board
Members exchange opinions with the President, executive officers, general managers ofdivisions and representatives of the subsidiaries, confirming the development and operation of
the internal control system in the process.
(d) The Audit & Supervisory Board Members hold discussions and exchanges of opinion with theInternal Auditing Division by taking part in site visits and meetings to report on the results ofaudits held by the Internal Auditing Division, and utilize the results of audits in audits by Audit& Supervisory Board Members.
(e) The Audit & Supervisory Board Members have maintained close cooperation with the
Accounting Auditor including meeting and exchanging opinions with the Accounting Auditor
and attending site visits by the Accounting Auditor, to implement effective audits.
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.
- 63 -

(Translation)

Consolidated Balance Sheet(as of March 31, 2023)(Millions of yen)Account title

AmountAccount title(Assets)
Current assets

Amount(Liabilities)
230,191

Current liabilities

205,252

Cash and deposits

37,746

Notes and accounts payable

60,653

Notes and accounts receivable, and contract assets

94,598

Short-term borrowings

86,714

Lease receivables and lease investment assets

7,619

Finished goods:

20,224Long-term liabilities

85,894Work in process:

21,135Long-term debt

31,268Raw materials and supplies:

35,076

Lease obligations

6,905

Others

13,847

Deferred tax liabilities

11,111

Allowance for doubtful receivables
Non-current assets(57)

Others

57,883

Provision for Directors’ retirement benefits

160,234

Liability for retirement benefits

Property, plant and equipment

60,959OthersBuildings and structures

25,179Total liabilities

Machinery, equipment and vehicles

8,546(Net Assets)

121
30,906
5,582

Tools, furniture and fixtures

7,099

Land

15,929

Capital stock

44,000Construction in progress

4,204

Additional paid-in capital

18,994

Intangible assets

16,349Retained earnings

49,705Investments and other assets

82,925

Treasury stock, at cost

Investments in securities

34,115

Other accumulated comprehensive income(12,770)

27,192Net unrealized holding gain/loss on othersecurities

1,077

24,941

Loss on deferred hedges(32)

14,453

Translation adjustments(8,341)(17,777)

Accumulated retirement benefits liability
adjustments(5,473)

Asset for retirement benefits
Long-term trade receivables
OthersAllowance for doubtful receivables

Shareholders’ equity

291,146

Subscription rights to shares
Non-controlling interests
Total assets

390,425- 64 -

111,858

(841)

121
69

Total net assets

99,279Total liabilities and net assets

390,425

(Translation)

Consolidated Statement of Operations(From April 1, 2022 to March 31, 2023)(Millions of yen)Account title

AmountNet sales

369,096

Cost of sales

282,903

Gross profit

86,192

Selling, general and administrative expenses

83,789Operating income

2,403

Non-operating income
Interest income

147

Dividend income

1,243

Gain on sale of investments in securities

343

Dividend income of insurance

476

Other

1,024

3,236

Non-operating expenses
Interest expense

1,853

Foreign exchange loss

1,318

Other

2,796

Ordinary loss

5,968
(328)

Loss before income taxes(328)

Income taxes

2,239

Income taxes deferred

216

Loss

2,456
(2,784)

Profit attributable to non-controlling interests

16

Loss attributable to owners of parent(2,800)- 65 -

(Translation)

Consolidated Statement of Changes in Net Assets(From April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Additional paid-in
capitalCapital stock
Balance at April 1, 2022

44,000Retained earnings

19,006

Treasury stock, at cost

Total shareholders’equity(869)

117,241

55,103

Changes during the term
under review
Dividends from surplus(2,597)(2,597)

Loss attributable toowners of parent(2,800)(2,800)Purchases of treasury
stock
Disposition of treasury
stock

(11)

(0)

(0)

28

16

Net changes in items
other than shareholders’equity during the term
under review
Net changes during the term
under review

–

(11)

(5,398)27(5,382)

Balance at March 31, 2023

44,00018,99449,705(841)

111,858

Accumulated other comprehensive income
Net unrealized
holding gain/loss
on othersecurities
Balance at April 1, 2022

1,030

Loss ondeferredhedges22

Translation
adjustments

Accumulated
retirement
benefits liability
adjustments(9,069)(1,788)

Total
accumulated
othercomprehensive
income(9,804)

Subscription
rights to shares

138

Noncontrollinginterests

Total net
assets60

107,635

Changes during the term
under review
Dividends from surplus(2,597)

Loss attributable toowners of parent(2,800)Purchases of treasury
stock

(0)

Disposition of treasury
stock

16

Net changes in items
other than shareholders’equity during the term
under review

46

(54)

727

(3,685)(2,966)(16)

9(2,973)

Net changes during the term
under review

46

(54)

727

(3,685)(2,966)(16)

9(8,356)

Balance at March 31, 2023

1,077

(32)

(8,341)(5,473)(12,770)

121

69

99,279- 66 -

(Translation)

Notes to Consolidated Financial Statements
Principles for Preparing Consolidated Financial Statements and Notes to Changes in Scope ofConsolidation and Scope of Equity Method Application
1.

Scope of consolidation(1) Number of consolidated subsidiaries: 57
Names of major consolidated subsidiaries:
OKI Crosstech Co., Ltd.; OKI Circuit Technology Co., Ltd.; OKI Software Co., Ltd.; OKI
Electric Cable Co., Ltd.; OKI Nextech Co., Ltd.; Oki Data Manufacturing (Thailand) Co.,
Ltd.; Oki Europe Ltd.
(2) Changes in scope of consolidation:
Oki Seatec Co., Ltd. is not included in the consolidated account since it has been absorbed
by Shizuoka Oki Electric Co., Ltd.
Likewise, OKI SISTEM VE YAZICICOZUMLERITICARET LIMITED SIRKETI, OKI ELECTRIC CABLE AMERICACORPORATION, Oki Electric Cable Changshu Co., Ltd., OKI Power Trading (Shenzhen)Co., Ltd. are not included due to their liquidation. Note that Shizuoka Oki Electric Co.,
Ltd. changed its name to OKI Com-Echoes Co., Ltd.

2.

Application of equity method(1) Names of affiliated companies to which the equity method is applied:
BANKING CHANNEL SOLUTIONS LIMITED and one other company(2) Name of affiliated company to which the equity method is not applied:
TOWN NETWORK SERVICE Corporation(Reason for not applying the equity method):
The company has little influence and has no significance on profit or loss and retained
earnings.

- 67 -

(Translation)
3.

Accounting standards(1) Valuation standards and methods for significant assets(i) Negotiable securities
The Company and its domestic consolidated subsidiaries value securities in accordance withhow they are held as indicated below.
Other negotiable securities:
Those other than shares without market value:
Stated at fair value (Any difference between book value and fair value is included in
net assets; sales costs are calculated by mainly the moving average method.)
Shares without market value:
Mainly stated at cost based on the moving average method(ii) Inventories
The Company and its domestic consolidated subsidiaries value inventories as below.
Overseas consolidated subsidiaries primarily apply the lower of cost or fair value.
Products:
Primarily 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 process:Primarily stated at cost based on the specific identification method. (Balance sheet
values are measured by the method of devaluing the book price to reflect declines in
profitability.)
Raw materials and supplies:
Primarily 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.)(iii) Derivatives:
Stated at fair value(2) Depreciation and amortization of important assets(i) Property, plant and equipment (excluding lease assets):
The Company and its domestic consolidated subsidiaries primarily apply the declining-balancemethod; overseas consolidated subsidiaries primarily apply the straight-line method.
(ii) Intangible assets (excluding lease assets)
The Company and its domestic consolidated subsidiaries apply the straight-line method.
For software sold in the market, amortization is based on the estimated amounts of sales in theestimated number of years for sales (3 years). For software for internal use, the straight-line method,
based on the estimated durable years (mainly 5 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 ownership are depreciatedover the lease contract’s lifetime by the straight-line method, assuming the residual value is zero.

- 68 -

(Translation)(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 the historical loss ratio for
non-classified loans/receivables and individual assessment for classified loans/receivables.
Overseas consolidated subsidiaries calculate the amount of potential loss by individually assessing
the possibility of collection for specific loans/receivables.
(ii) Provision for Directors’ retirement benefits
Some consolidated subsidiaries register the necessary amount at the end of the year inaccordance with internal rules to prepare for the payment of Directors’ retirement allowance.
(4) Basis for provision of income and expense(i) Sales of products
Revenue from product sales in the Solution Systems business and the Components & Platforms
business is recognized when the customer’s acceptance inspection is complete if the acceptanceinspection is carried out, or when the delivery is made in the case where the acceptance inspection
is not carried out, depending on the agreement, etc. with the given customer.
(ii) Provision of services
Revenue from provision of services in the Solution Systems business and the Components &Platforms business is recognized accordance to the provision of services. In the case that theprovision of services is made over the agreed duration, such as regular maintenance contracts,
revenue is recognized based on the elapsed time period.
For contract productions and engineering work of social infrastructure mainly in the Solution
Systems business, revenue is recognized based on the progress of the performance obligation, on theassumption that the obligation is satisfied over a certain period. In such a case, the progress ismeasured by the ratio of the costs incurred by the end of the term to the estimated total costs.
(5) Important hedge accounting methods(i) Hedge accounting methods
Deferred hedging is applied. Allocation treatment is applied for forward exchange contracts
eligible for allocation treatment. Special treatment is applied to interest rate swaps that meet therequirements for special treatment.
(ii) Means of hedging and hedged item
Forward exchange contracts are used to hedge fluctuations of exchange rates on credits anddebts in foreign currencies. Interest rate swaps are employed to hedge fluctuations of market
interest rates on variable-rate and long-term debt.
(iii) Hedging policy
Derivative instruments are used to hedge fluctuations of market rates on credits and debts.
(iv) Assessment method of the effectiveness of hedges
To determine the effectiveness, the Company compares the accumulated total of the market
fluctuations or the cash flow fluctuations for the hedged item and that of 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 then makes a decision based on the changes of the two.
(6) Amortization of goodwill and amortization period- 69 -

(Translation)
Goodwill is evenly amortized over its useful life (mainly five years).
(7) Other important matters in preparation of consolidated financial statements(i) Method of accounting for retirement benefitsa. Attributing expected retirement benefits to a period
When calculating retirement benefit obligations, the Company applies the benefit formulabasis to attribute expected retirement benefits to the period until the end of the fiscal year underreview.
b. Accounting for actuarial gains and losses, and prior service costs
Prior service costs are amortized by the straight-line method over a set number of years (9to 13 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 ofyears (9 to 13 years) within the average remaining years of service of employees.
(ii) Application of group tax sharing system
The group tax sharing system is applied.
Changes in Accounting Policies
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, June 17, 2021) from the beginning of the fiscal year ended March 31,
2023, and it has applied the new accounting policy provided for by the Implementation Guidance on AccountingStandard for Fair Value Measurement prospectively in accordance with the transitional measures provided forin paragraph 27-2 of the Implementation Guidance on Accounting Standard for Fair Value Measurement. Thischange has no impact on the consolidated financial statements.
Notes on Accounting Estimates
1. Estimate of recoverability of claims for which litigation is currently pending(1) Amount recognized on the consolidated financial statements for the fiscal year
Allowance for doubtful receivables: ¥8,832 million(2) Information regarding important accounting estimates for the item identified(i) Overview
Oki Banking Systems (Shenzhen) Co., Ltd. (hereinafter “OBSZ”), a consolidated subsidiary of
the Company in China, includes accounts receivable of RMB1,111.957 million (¥21,594 million if
converted to Japanese yen based on the exchange rate as of the end of the fiscal year under review)
from Shenzhen Yihua Computer Industrial Co., Ltd. (hereinafter “Yihua Industrial”) in long-term
trade receivables. OBSZ filed a request for arbitration with the South China International Economic
and Trade Arbitration Commission, on October 10, 2015, demanding payment of such accounts
receivable and compensation of damages (Case A). Further, OBSZ filed litigation to commingle
property beyond legal personality with the High People’s Court of Guangdong Province against
Shenzhen Yihua Computer Co., Ltd. (“Yihua Computer”), the parent of Yihua Industrial, and others
as defendants, claiming that they are jointly and severally responsible for payment of the above
claims against Yihua Industrial which had been unpaid, to request protection of property (Case B).
Subsequently, Case A was adjudicated by the South China International Economic and Trade
Arbitration Commission on December 16, 2020, and it ruled that Yihua Industrial pay OBSZ theunpaid amount for merchandise of RMB1,096.866 million (¥21,301 million if converted to Japanese
yen based on the exchange rate as of the end of the fiscal year under review) as well as interest for
arrears, legal costs, and others, and this is being settled by arbitration. Regarding Case B, on
December 23, 2021, the High People’s Court of Guangdong Province sentenced Yihua Computer- 70 -

(Translation)
and affiliates to take the collective liability for the payment to be made by Yihua Industrial to OBSZ.
In response to this, Yihua Computer and affiliates lodged an appeal to the Supreme People’s Court
on January 5, 2022. The case is currently pending.
Given that it is expected to take a considerable amount of time before Yihua Industrial fulfills
the arbitration result of Case A, OBSZ has allowance for doubtful receivables recorded from the pastyear.
(ii) Calculation method for the amount recognized on the consolidated financial statements for the fiscal
year and major assumptions to the calculation
For OBSZ, as a result of discounting cash flows that are considered recoverable when theprobability of the ruling on December 23, 2021 being upheld and the law suit being settled in Case
B is taken into account for a period that is considered to be required for recovery, RMB454.835
million (¥8,832 million if converted to Japanese yen based on the exchange rate as of the end of the
fiscal year under review) is estimated to be irrecoverable and added to allowance for doubtfulreceivables.
(iii) Impact on the consolidated financial statements for the next fiscal year
There is a possibility that the amount estimated to be irrecoverable will vary significantly
depending on the outcome of the lawsuit of Case B.
2.

Estimate of total costs used to measure the progress of the performance obligation in the recognitionof revenue(1) Amount recognized on the consolidated financial statements for the fiscal year
Among the revenue associated with the performance obligation satisfied over a certain period, revenue
recorded based on the progress calculated by the ratio of the incurred costs to the estimated total costs
was ¥57,618 million (including revenue for projects completed before the end of the fiscal year). Of
which, an amount recognized for the fiscal year in relation to construction projects that were work-inprogress at the end of the fiscal year is ¥29,546 million.
(2) Information regarding important accounting estimates for the item identified(i) Calculation method for the amount recognized on the consolidated financial statements for the fiscal
year and major assumptions to the calculation
As for the method of estimating progress towards satisfaction of performance obligations, thedegree of progress is calculated at the proportion of actual cost to estimated total costs (input method).
In addition, when estimating total cost, a reliably estimate of the amount is made based on
judgment of construction supervisors and the management. For example, we review the execution
budget in a timely and appropriate way and it has been developed by collecting sufficient and detailed
information relating to changes in the work scope based on customers’ requests.
(ii) Impact on the consolidated financial statements for the next fiscal year
Contract manufacturing and construction for social infrastructure performed by the Group arehighly individualized in nature given they are designed based on instructions of customers.
Accordingly, changes in work scope at the request of a customer, unexpected defects during the
manufacturing process of software, and other factors may result in a considerable increase in workhours required for manufacturing. On the other hand, cost to be incurred in the future may be
reduced as a result of our own efforts.
If the estimated total cost changes due to those impacts and other factors, net sales may change
in conjunction with a change in the degree of progress.

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(Translation)
3.

Estimate of recoverability of deferred tax assets(1) Amount recognized on the consolidated financial statements for the fiscal year
Deferred tax assets: ¥9,627 million(2) Information regarding important accounting estimates for the item identified(i) Calculation method for the amount recognized on the consolidated financial statements for the fiscal
year and major assumptions to the calculation
The Group evaluates the recoverability of deferred tax assets by taking into account thepossibility of being able to use deductible temporary difference and part of loss carry forwards in theestimation of future taxable income. We believe deferred tax assets recognized for the fiscal year are
highly recoverable based on the projection of future taxable income over a period during which
deferred tax assets are deductible.
An estimate of future taxable income used in evaluating the recoverability of deferred tax assets
is based on the future business plans.
(ii) Impact on the consolidated financial statements for the next fiscal year
The management judges the abovementioned major assumptions reasonable. However, if
actual future taxable income differs from the estimate as a result of significant changes in the
management environment and other factors, the recoverability of deferred tax assets may beevaluated differently.

Additional Information
Accounting process of corporate tax and local corporate tax or accounting process of tax effect accounting
relating thereto
The Company and its consolidated subsidiaries in Japan have applied the group tax sharing systemfrom the fiscal year under review. In accordance with “Practical Solution on the Accounting andDisclosure Under the Group Tax Sharing System” (ASBJ PITF No. 42, August 12, 2021), the Company
and its consolidated subsidiaries in Japan have performed the accounting process of the corporate tax andlocal corporate tax or the accounting process of the tax effect accounting relating thereto and have disclosed
such information.
Notes to Consolidated Balance Sheet
1. Assets pledged as collateral for borrowings
Investments in securities
Liabilities collateralized by the abovementioned assets:
Short-term borrowings¥4,671 million

2.

Accumulated depreciation on property, plant and equipment¥163,953 million

3.

Liabilities for guarantee
Guarantee for borrowings by employees¥3,500 million¥37 million- 72 -

(Translation)
4.

Contingent liabilities
OKI Brasil Indústria e Comércio de Produtos e Tecnologia em Automação S.A. (hereinafter “OKI
Brasil”), a consolidated subsidiary of the Company, received an additional tax assessment notice of ICMS
(tax on circulation of goods and services) of BRL90 million (¥2,359 million if converted to Japanese yen
based on the exchange rate as of the end of the fiscal year under review) from the tax authorities of Sao
Paulo State on August 20, 2018. However, OKI Brasil refuses to accept this order, and it has filed alawsuit.
The Company cannot reasonably estimate the probability of the occurrence of a loss or the amount ofa loss at present.

Notes to Consolidated Statement of Changes in Net Assets
1. Matters concerning class and total number of shares outstanding as of the end of FY2022
Common stock:
87.217 million shares
2.

Matters concerning appropriation of surplus(1) Dividends paid
Resolution

Class ofshares

Source ofdividends

Total dividends(millions ofyen)

Ordinary General
Meeting of
Shareholders on
June 29, 2022

Commonstock

Retainedearnings

2,597

Dividends per
share (yen)30.00

Record date

Effective date

March 31, 2022

June 30, 2022

(2) Dividends for which the record date falls in the fiscal year under review and the effective date falls in
the following fiscal year.

3.

Proposal

Class ofshares

Source ofdividends

Total dividends(millions ofyen)

Dividends per
share (yen)Record date

Effective dateOrdinary General
Meeting of
Shareholders on
June 27, 2023

Commonstock

Retainedearnings

1,732

20.00

March 31, 2023

June 28, 2023

Number of shares to be issued upon exercise of stock acquisition rights
Category

Breakdown of stock acquisitionrightsThe Company

FY2016 Stock Acquisition Rights(issued on August 16, 2016)
FY2017 Stock Acquisition Rights(issued on August 15, 2017)
FY2018 Stock Acquisition Rights(issued on August 14, 2018)
FY2019 Stock Acquisition Rights(issued on August 14, 2019)
FY2020 Stock Acquisition Rights(issued on August 18, 2020)

Type of shares to be issued
upon exercise of stockacquisition rights

Number of shares to be issued
upon exercise of stockacquisition rights (shares)

Common stock

17,900Common stock

26,100Common stock

29,800Common stock

33,700Common stock

41,400- 73 -

(Translation)
Notes on Financial Instruments
1. Matters concerning the status of financial instruments(1) Policy on financial instruments
The OKI Group mainly uses short-term deposits and highly safe marketable securities for fundmanagement. Also, it raises its funds primarily through borrowings from financial institutions andissuance of corporate bonds. The Group uses derivatives to hedge risk as described below, and does
not engage in speculative transactions.
(2) Description of financial instruments, related risks, and risk management system
The Group strives to mitigate its customers’ credit risks associated with notes and accounts
receivable, which are operating receivables, by carrying out customer credit investigations inaccordance with regulations for the management of accounts receivable of individual companies.
For borrowings, the Group raises short-term funds mainly for working capital and long-term funds
for working capital and capital investment. For borrowings exposed to the interest rate risk, the Groupapplies derivative instruments (interest rate swap transactions) to hedge its risk.
Derivative transactions consist of forward foreign exchange contracts, which aim to hedge
exchange rate fluctuation risks related to foreign currency-denominated receivables and payables, andinterest rate swap transactions, which aim to hedge interest rate fluctuation risks related to the paymentof borrowings. The assessment of hedge effectiveness for interest rate swap transactions that satisfy
the requirements for special treatment is omitted.
The Group executes and manages derivative transactions in accordance with the OKI Group’s
policy.
(3) Supplemental explanation regarding the disclosure concerning fair value of financial instruments
The fair value of financial instruments is based on market prices, but if no market prices areavailable, their fair value reflects the value reasonably calculated. Because fluctuation factors areincorporated into the calculation of the said value, it may change if different prerequisites, etc. are used.

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(Translation)2.

Disclosure concerning fair value of financial instruments
As of March 31, 2023 (consolidated balance sheet date), the amount recorded in the consolidatedbalance sheet, fair value, and the amount of differences are as shown in the table below.
(Unit: Millions of yen)Amount recorded inconsolidated balance
sheet (*1)

(1) Investments in securities (*3)

25,744(2) Long-term trade receivables

24,941

Allowance for doubtful receivables (*4)(3) Long-term debt (*5)

Fair value (*1)

Difference

25,75814

12,782

12,782-(50,688)(51,040)352(12,159)(4) Derivative transactions (*6)
(173)
(173)
(*1) Those recorded as liabilities are shown in brackets.
(*2) Notes are omitted on cash and deposits; notes and accounts receivable, and contract assets; notes and accounts payable; and shortterm borrowings, because they are settled within a short period and thus the fair values are close to the book values.
(*3) Shares without market value (unlisted shares, ¥8,370 million in the consolidated balance sheet) are not included in “(1) Investments
in securities.”(*4) Allowance for doubtful receivables specifically provided for long-term trade receivables is deducted.
(*5) Long-term debt that will be reimbursed within one year (¥19,420 million) is classified as “short-term” borrowings in the
consolidated balance sheet.
(*6) Net claims receivable and payable incurred from derivative transactions are shown in net amount, and items whose totals are net
liabilities are shown in brackets.

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(Translation)
3.

Matters concerning components of fair value of financial instruments by appropriate category, etc.
The fair value of financial instruments is categorized into the following three levels, depending on theobservability and significance of the inputs used to calculate the fair value.
Level 1: The fair value that is calculated from the market price associated with the asset or liability
subject to the calculation of given fair value in the active market, among inputs used to
calculate an observable fair value
Level 2: The fair value that is calculated using inputs other than the inputs applicable to Level 1, among
inputs used to calculate an observable fair value
Level 3: The fair value that is calculated using inputs that are used for calculation of unobservable fairvalue
In the case where more than one input is used, among inputs that have a significant impact on thecalculation of the fair value, the fair value is categorized into the level with the lowest priority forcalculation of the fair value, among the levels to which those inputs belong.
(1) Financial instruments listed in the consolidated balance sheet with their fair value
Category
Investments in securities
Other negotiable securities
Equity Securities
Derivative transactions*

Fair value (Millions of yen)
Level 2
Level 3

Level 125,734
–

–
(173)

Total

–
–

25,734(173)* Net claims receivable and payable incurred from derivative transactions are shown in net amount, anditems whose totals are net liabilities are shown in brackets.
(2) Financial instruments other than those listed in the consolidated balance sheet with their fair value
Category
Investments in securities
Other negotiable securities
Golf club memberships
Long-term trade receivables
Long-term debt

Fair value (Millions of yen)
Level 2
Level 3

Level 1

–
–
–

24
–
51,040–12,782–

Total

24
12,782
51,040(Note) Fair value evaluation technique and inputs for fair value calculation
Investments in securities
Listed shares and golf club memberships are evaluated using the market price. Since listed sharesare traded in the active market, the fair value is categorized in Level 1. On the other hand, golfclub memberships are traded in the inactive market at the market value of the same asset; therefore,
the fair value is categorized in Level 2.
Long-term trade receivables
The fair value of the long-term trade receivables is the amount calculated by deducting the present
estimated doubtful receivables from the book value. The estimated doubtful receivables arecalculated based on the present value of loans/receivables by discounting estimated cash flows,which are considered recoverable when taking into account the probability related to lawsuits, for aperiod that is considered to be required for recovery. Based on this, the fair value is categorized in
Level 3.
Long-term debt
The fair value of these items is based primarily on the method of calculation whereby the sum of- 76 -

(Translation)
principal and interest is discounted by an assumed interest rate on the assumption that the said sum
is freshly borrowed in a similar manner. Some long-term debt with floating interest rates isprescribed to be subject to special accounting treatment applicable to interest rate swaps. Hence,
the fair value of a long-term debt is based on the method of calculation whereby the sum of principal
and interest, treated in combination with the said interest rate swap, is discounted by a reasonably
estimable interest rate on the assumption that the said amount is freshly borrowed in a similar manner.
The fair value of the long-term debt is categorized in Level 2.
Derivative transactions
The fair value is calculated based on the price presented by the partner financial institutions, and iscategorized in Level 2. Derivative transactions subject to special accounting treatment applicable
to interest rate swaps are treated in combination with long-term debt as hedged items. Hence, theirfair value is included in that of long-term debt.

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(Translation)
Notes on Revenue Recognition
1. Information on disaggregation of revenue from contracts with customers(Unit: Millions of yen)
Reportable segment
Components &Platforms

Solution
Systems<Breakdown of net sales>
Revenue from contracts withcustomers
Other revenue
Total net sales<Geographical market>
Revenue from contracts withcustomers
Japan
EuropeAsia
North America
OthersOther revenue
Japan<Timing of revenue recognition>
Revenue from contracts withcustomers
Revenue recognized at one point
Revenue recognized over time

Total

Other
(Note)

Total

179,344

186,289

365,633

527

366,16118
179,362

2,916
189,205

2,934
368,568527

2,934
369,096

176,93635
2,372
0127,726
25,40020,916
7,965
4,280

304,662
25,43523,288
7,965
4,281

527
-

305,190
25,43523,288
7,965
4,281

18

2,916

2,934

-

2,934

54,181
125,163

153,209
33,079207,390
158,24267
460

207,458
158,703(Note) “Other” includes businesses that are not under the reporting segment, such as service provision,
manufacture and sales of other devices or products.

PublicSolutions
Revenue from contracts withcustomers
Other revenue
Total net sales

54,20454,204(Unit: Millions of yen)
By business areas (Solution Systems) (Note)Engineering
Enterprise
work andDX Platform
Total
Solutionsmaintenanceservices
61,502
14,44149,195
179,344
61,502

18
14,46049,195

18
179,362(Note) The following describes the main products and services in each business area.
Business area
Public Solutions

Enterprise Solutions
DX Platform
Engineering work and maintenance services

Main products and services
Road (ETC/VICS), aviation control, disaster preparedness, fire fighting, central
government agencies systems, government statics systems, defense systems(underwater acoustics/information), aircraft equipment, infrastructure monitoring,etc.
Carrier network, video distribution, 5G and local 5G, financial store systems,
concentrated operation systems, railway ticket systems, airport check-in systems,
manufacturing systems (ERP/IoT), etc.
AI edge computers, censors, IoT network, PBX, business phones, contact centers,
cloud services, etc.
Engineering work, maintenance services, etc.

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(Translation)(Unit: Millions of yen)
By business areas (Components & Platforms) (Note)
Components
Mono-zukuri Platform
Total
Revenue from contracts withcustomers
Other revenue
Total net sales(Note)

110,955

75,334

186,289

2,916
113,871

75,334

2,916
189,205

The following describes the main products and services in each business area.
Business area

Components
Mono-zukuri Platform

Main products and services
ATM, cash processors, store terminals, reservation ticket terminals, check-in
terminals, currency exchange machines, ATM monitoring and operation services,color and monochrome LED printers, color and monochrome LED multifunction
machines, large format inkjet printers, dot impact printers, etc.
Contract design and production services, printed circuit boards, etc.

2.

Information to understand the revenue from contracts with customers
Information forming the basis for understanding revenue is as stated in “Principles for Preparing
Consolidated Financial Statements and Notes to Changes in Scope of Consolidation and Scope of Equity
Method Application 3. Accounting standards (4) Basis for provision of income and expense.”

3.

Information to understand the revenue in this fiscal year and onwards(1) Balances of receivables from contracts with customers, contract assets and contract liabilities(Unit: Millions of yen)
As of March 31, 2023

As of April 1, 2022
Receivables from contracts withcustomers
Of which, notes receivable
Of which, accounts receivable
Contract assets
Contract liabilities

77,69370,9388,400
69,293
16,298
8,548

4,691
66,24623,1997,217(Note 1) Contract assets are recognized as right to consideration recorded by recognition of revenue inaccordance with the degree of progress mainly on contracted manufacturing and various types of
construction work. When the right to consideration becomes unconditional, they are transferred
into receivables. Contract liabilities are related mainly to deposits received from customers basedon service provision contracts that recognize revenue over a certain period, and are revised uponrecognition of revenue.
(Note 2) Among the revenue recognized in this fiscal year, the amount included in the contract liabilities atthe beginning of the year was ¥4,630 million. The amount of revenue recognized from theperformance obligation that was satisfied (or partly satisfied) in the past period has no significance.
(Note 3) The increase in contract assets is mainly due to progress on contracted manufacturing and various
types of construction work.
(Note 4) Contract liabilities are included in “Others” under the current liabilities in the consolidated financial
statements.

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(Translation)(2) Trading amount of unsatisfied performance obligation
The Group applies practical expedient to the notes on the trading amount allocated to the unsatisfied
performance obligation. Notes are omitted for unsatisfied performance obligation based on the agreements
initially expected to last for a year or shorter.
The total trading amount allocated to the unsatisfied performance obligation at the end of this fiscal
year and the duration within which the revenue may be recognized are as follows.

Within one year
One year to three years
Over three years
Total(Unit: Millions of yen)
Fiscal year under review
29,682
22,975706
53,364

Notes to Per-share Information
1. Net assets per share:¥1,143.96
2. Loss per share:¥32.33- 80 -

(Translation)

Transcript of Accounting Auditors’ Report on Consolidated Financial Statements

Independent Auditors’ Report
May 19, 2023
To: Board of Directors
Oki Electric Industry Co., Ltd.
PricewaterhouseCoopers Aarata LLC
Tokyo Office
Tsuyoshi Saito,
Engagement Partner, Certified Public Accountant
Takeaki Ishibashi,
Engagement Partner, Certified Public Accountant
Yoshihiro Shiribiki,
Engagement Partner, Certified Public Accountant
Audit opinion
We have audited the consolidated financial statements – the consolidated balance sheet, the consolidated statement of operations,the consolidated statement of changes in net assets equity and notes to the consolidated financial statements – of Oki ElectricIndustry Co., Ltd. for the 99th term from April 1, 2022 to March 31, 2023 in accordance with Article 444 paragraph (4) of theCompanies Act.
We concluded that the consolidated financial statements fairly present in all aspects of Oki Electric Industry’s and its subsidiaries’
assets and income or loss in accordance with corporate accounting standards generally accepted in Japan.
Basis for audit opinion
We have conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities underthose standards are further described in the “Responsibility of auditors for the audit of the consolidated financial statements”
section of our report. We are independent of the Company and its consolidated subsidiaries in accordance with the ethicalrequirements that are relevant to our audit of the consolidated financial statements in Japan, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Other Information
The other information refers to the business report and its supplementary schedules. Management is responsible for preparing
and disclosing the other information. In addition, the Audit & Supervisory Board Members and the Audit & Supervisory Board
are responsible for overseeing the Directors’ performance of duties within the maintenance and operation of the reporting process
for the other information.
The scope of our audit opinion on the consolidated financial statements does not include the content of the other information, andwe do not express an opinion regarding the other information.
Our responsibility in auditing the consolidated financial statements is to read through the other information, and in the process ofreading it, we examine whether there are material differences between the other information and the consolidated financial
statements or the knowledge we have gained in the auditing process, and we also pay attention as to whether there are any
indications in the other information of material errors besides such material differences.
If we determine there to be material errors in the other information based on the work we have performed, we are required toreport those facts.
There are no matters to report regarding the other information.
Responsibilities of management, Audit & Supervisory Board Members and the Audit & Supervisory Board for preparing
consolidated financial statements
Oki Electric Industry’s management is responsible for preparing and presenting fairly these consolidated financial statements inaccordance with corporate accounting standards generally accepted in Japan. This includes designing and operating internal
control that the management determines necessary to prepare and fairly present these consolidated financial statements that arewithout material misstatement due to fraud or errors.
In preparing the consolidated financial statements, management is responsible for assessing whether it is appropriate to prepare
the consolidated financial statements with the assumption of a going concern, and in accordance with corporate accounting
standards generally accepted in Japan, for disclosing, as necessary, matters related to going concern.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the Directors’
performance of duties within the maintenance and operation of the financial reporting process.

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(Translation)

Responsibility of auditors for the audit of the consolidated financial statements
Our responsibilities are to obtain reasonable assurance about whether the consolidated financial statements as a whole are freefrom material misstatement, whether due to fraud or error, and to issue an auditor’s report that expresses our opinion on the
consolidated financial statements based on our audit from an independent point of view. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisionsof users of these consolidated financial statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintain professional
skepticism throughout the audit process to perform the following:• Identify and assess the risks of material misstatement, whether due to fraud or error, and design and perform audit procedures
responsive to those risks. Selecting audit procedures to be applied is at the discretion of the auditor. Obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion.
• When auditing the consolidated financial statements, obtain an understanding of internal control relevant to the audit in orderto design audit procedures that are appropriate in the circumstances in making risk assessments, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control.
• Evaluate the appropriateness of accounting policies used by management and their method of application, as well as thereasonableness of accounting estimates made by management and the appropriateness of related notes thereto.
• Conclude on the appropriateness of preparing the consolidated financial statements with the assumption of a going concern
by management, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the notes to the consolidated financial statements
or, if the notes to the consolidated financial statements on material uncertainty are inadequate, to express a qualified opinion
with exceptions on the consolidated financial statements. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
• Evaluate whether the presentation of the consolidated financial statements and notes to the consolidated financial statements
are in accordance with corporate accounting standards generally accepted in Japan, as well as evaluate the presentation,
structure, and content of the consolidated financial statements, including the related notes thereto, and whether the
consolidated financial statements fairly present the underlying transactions and accounting events.
• Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its consolidated
subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervisionand performance of the audit of the consolidated financial statements. We remain solely responsible for our audit opinion.
We report to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit process, and other matters required by auditing standards.
We also provide the Audit & Supervisory Board Members and the Audit & Supervisory Board with a statement that we havecomplied with relevant ethical requirements in Japan regarding independence, and communicate with them all relationships andother matters that may reasonably be deemed to bear on our independence, and where applicable, related safeguards in order toeliminate or reduce obstruction factors.
Conflict of interest
We or engagement partners have no interests in the Company and its consolidated subsidiaries, which should be stated incompliance with the Certified Public Accountants Act.

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(Translation)

Non-Consolidated Balance Sheet(as of March 31, 2023)

Current assets

Account title(Assets)

AmountCash and deposits

25,075

Notes receivable
Accounts receivable, trade
Contract assets
Lease investment assets
Finished goods:
Work in process:Raw materials and supplies:
Advance payments - trade
Prepaid expenses
Short-term loans receivable
Accounts receivable, others
Others

1,114
48,16919,448
7,583
12,53014,282
20,35580
3,128
13,897
8,738
1,055

Allowance for doubtful receivables
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Vessels
Accumulated depreciation
VehiclesAccumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land
Construction in progress
Total property, plant and equipment
Intangible assets
Right of using facilities
SoftwareTotal intangible assets
Investments and other assets
Investments in securities
Investments in and advances tosubsidiaries and affiliates
Contribution
Contribution in subsidiaries andaffiliates
Long-term loans receivable fromsubsidiaries and affiliates
Claims provable in bankruptcy,
rehabilitation and other(9)
175,451
43,88529,0902,382
1,902
14,464
12,657192
93
89
83
42,33936,806

14,795
480
1,807
98
5
5,532
9,010
2,013
33,743112
15,43015,54331,219Account title(Liabilities)
Current liabilities
Electronically recorded obligations operating
Accounts payable, trade
Short-term borrowings
Current portion of long-term debt
Lease obligations
Accounts payable, others
Other accrued expenses
Income taxes payable
Contract liabilities
Deposits received
Unearned revenue
Provision for product warranties
Provision for directors’ bonuses
Provision for loss on construction
contracts
Provision for contingent loss
Asset retirement obligations
OthersTotal current liabilities
Long-term liabilities
Long-term debt
Lease obligations
Deferred tax liabilities
Retirement benefits
Provision for product warranties
Provision for loss on business of
subsidiaries and affiliates
Provision for contingent loss
Asset retirement obligations
OthersTotal long-term liabilities
Total liabilities(Net Assets)
Shareholders’ equity
Capital stock
Additional paid-in capital
Capital reserve
Other additional paid-in capital
Retained earnings
Other retained earnings

31,107Retained earnings carried forward

6
1,545
22,25028(Millions of yen)Amount3,465
44,131
66,251
19,4203,296
12,866
7,212
396
5,195
24,477
3
879
92
2,539
49
0
111
190,388
31,2685,881
9,052
11,450
441
503
66
1,196
1,249
61,108251,497
44,00021,47615,000
6,476
7,445
7,445
7,445

Treasury stock, at cost

(833)

Total shareholders’ equity

72,088Valuation, translation adjustments andothersNet unrealized holding gain/loss onother securities

807

Long-term prepaid expenses

1,289

Loss/gain on deferred hedges(32)

Prepaid pension cost

19,099Total valuation, translation
adjustments and others

775

Lease and guarantee deposits

2,597

Subscription rights to shares

121

OthersAllowance for doubtful receivables
Total investments and other assets
Total non-current assets
Total assets

228(9,628)99,744
149,031324,482

Total net assets
Total liabilities and net assets

72,985
324,482- 83 -

(Translation)

Non-Consolidated Statement of Operations(From April 1, 2022 to March 31, 2023)(Millions of yen)Account title

AmountNet sales

234,884

Cost of sales

197,910Gross profit

36,974

Selling, general and administrative expenses

53,859Operating loss

(16,885)

Non-operating income
Interest income

473

Dividend income

8,031

Foreign exchange gain

605

Other

1,160

10,271Non-operating expenses
Interest expense

1,776

Provision of allowance for doubtful receivables(454)

Penalty

(290)

Other

974

Ordinary loss

2,004
(8,618)Extraordinary profit
Gain on sale of investments in securities

334

334

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

192

Loss on impairment of fixed assets

394

Nondeductible write-downs of shares of subsidiaries and affiliates

399

Loss on disaster

138

Loss before income taxes

1,124(9,408)

Income taxes(3,361)

Income taxes deferred

244

Loss

(3,117)(6,291)- 84 -

(Translation)

Non-Consolidated Statement of Changes in Net Assets(From April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity
Additional paid-in capital
Capitalstock

Balance at April 1,
2022

44,000Retained earnings

Capitalreserve

Other
Additional
paid-in
capitalTotal
additional
paid-in capital

15,0006,488

21,488Other retained
earnings
Retained earnings
carried forward

Total Retained
earnings

Treasury stock,at costTotal
shareholders’equity(861)

80,962

16,334

16,334

Dividends fromsurplus(2,597)(2,597)(2,597)Loss(6,291)(6,291)(6,291)

Changes during theterm under review

Purchases oftreasury stock
Disposition oftreasury stock

(11)

(11)

(0)

(0)

28

16

Net changes in
items other thanshareholders’equity during theterm underreview
Net changes during
the term underreview
Balance at March
31, 2023

–

–

(11)

(11)

(8,889)(8,889)27(8,873)44,00015,0006,476

21,476

7,445

7,445

(833)

72,088Valuation, translation adjustments and others
Unrealized holding
gain/loss on other securities
Balance at April 1, 2022

Loss/gain on deferredhedges763

22

Total valuation, translation
adjustments and others
785

Subscription
rights to shares

Total net assets

138

81,886

Changes during the term
under review
Dividends from surplus(2,597)Loss(6,291)

Purchases of treasury stock(0)

Disposition of treasury stock16

Net changes in items otherthan shareholders’ equity
during the term under review

44

(54)

(10)

(16)

(27)

Net changes during the term
under review

44

(54)

(10)

(16)

(8,900)

Balance at March 31, 2023

807

(32)

775

121

72,985- 85 -

(Translation)

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

Standards and valuation methods for negotiable securities
Shares of subsidiaries and affiliated companies:
Stated at cost based on the moving average method
Other negotiable securities:
Those other than shares without market value:
Stated at fair value.
(The difference between book value and fair value is included in net assets. The sale costis calculated by using the moving average method.)
Shares without market value: Stated at cost based on the moving average method

2.

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

3.

Standards and valuation methods for inventories
Finished goods:
Primarily 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 process:Primarily stated at cost based on the specific identification method. (Balance sheet
values are measured by the method of devaluing the book price to reflect declines
in profitability.)
Raw materials and supplies:
Primarily 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.)

4.

Depreciation and amortization of non-current assets
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.
Intangible assets (excluding lease assets)
Software for sale in the market:
Amortization method based on the estimated amounts of sales in the estimated number ofyears for sales (3 years)
Software for internal use:
Straight-line method based on the estimated durable years (mainly 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.

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(Translation)
5.

Basis for provision of reserves
Allowance for doubtful receivables
To prepare for any losses on accounts receivable and loans, the Company calculates the amount ofpotential loss by using the historical loss ratio in the case of non-classified loans/receivables and byindividual assessment in the case of classified loans/receivables.
Provision for product warranties
To prepare for the expenses caused by free repairs that occur after product sales, the Company includes
a provision for product warranties based on past performance or individual estimates.
Provision for directors’ bonuses
To prepare for the payment of bonuses to officers (includes Executive Officers, the same applies
below), the Company records the amount attributable to the current fiscal year out of the amount of bonuses
expected to be paid to officers.
Provision for loss on construction contracts
To prepare for any losses on construction contracts, the estimated amounts of losses for the following
fiscal years are calculated for some of the order backlog as of the end of the fiscal year under review, which
are likely to incur losses and for which the amounts thereof can be reasonably estimated.
Provision for contingent loss
To prepare for losses that may occur in the future, the Company includes a provision for contingency
losses rationally calculated based on individual risks, etc.
Provision for loss on the Anti-Monopoly Act
To prepare for any losses relating to the Anti-Monopoly Act, the estimated amount for the current
fiscal year end is recorded.
Retirement benefits
To prepare for payment of retirement benefits to employees, the Company records the amountrecognized to accrue at the end of the fiscal year based on the estimated values of retirement benefit
obligations and pension assets.
Prior service cost is amortized by the straight-line method over a certain number of years (12 years)
within the average remaining years of service of employees.
The actuarial difference is amortized proportionately using the straight-line method over a certain
number of years (12 years) within the average remaining service period of the employees from the fiscal
year after the one in which it arises.
Provision for loss on business of subsidiaries and affiliates
In order to prepare for a loss on business of subsidiaries and affiliates, the Company records theamount of expected loss to bear in consideration of the financial position, operating results, etc. of thesecompanies.

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(Translation)
6.

Basis for provision of income and expense(1) Sales of products
Revenue from product sales is recognized when the customer’s acceptance inspection is complete
if the acceptance inspection is carried out, or when the delivery is made in the case where theacceptance inspection is not carried out, depending on the agreement, etc. with the given customer.
(2) Provision of services
Revenue from provision of services is recognized according to the provision of services. In thecase that the provision of services is made over the agreed duration, such as regular maintenancecontracts, revenue is recognized based on the elapsed time period.
For contract productions and engineering work of social infrastructure, revenue is recognizedbased on the progress of the performance obligation, on the assumption that the obligation is satisfied
over a certain period. In such a case, the progress is measured by the ratio of the costs incurred by
the end of the term to the estimated total costs.

7.

Hedge accounting methods(1) Hedge accounting methods
Deferred hedging is applied. Allocation treatment is applied for forward exchange contracts
eligible for allocation treatment. Special treatment is applied to interest rate swaps that meet therequirements for special treatment.
(2) Means of hedging and hedged item
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 and long-term debt.
(3) Hedging policy
Derivative instruments are used to hedge fluctuations of market rates on credits and debts.
(4) Assessment method of hedging effectivenessTo determine the effectiveness, the Company compares the accumulated total of the market
fluctuations or the cash flow fluctuations for the hedged item and that of the market fluctuations or
the cash flow fluctuations for the means of hedging, during the period from the start of hedging to theassessment. The Company then makes a decision based on the changes of the two.

8.

Other important matters in preparation of non-consolidated financial statements(1) Accounting for retirement benefits
The methods of accounting for unappropriated amounts of unrecognized prior service costs andunrecognized actuarial gains and losses for retirement benefits differ from those in the consolidated
financial statements.
(2) Application of group tax sharing system
The group tax sharing system is applied.

Changes in Accounting Policies
Application of Accounting Standard for Fair Value Measurement, Etc.
The Company has applied the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, June 17, 2021) from the beginning of the fiscal year ended March
31, 2023, and it has applied the new accounting policy provided for by the Implementation Guidance on
Accounting Standard for Fair Value Measurement prospectively in accordance with the transitional
measures provided for in paragraph 27-2 of the Implementation Guidance on Accounting Standard for Fair
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(Translation)
Value Measurement. This change has no impact on the non-consolidated financial statements.
Notes on Accounting Estimates
1. Estimate of recoverability of receivables from consolidated subsidiaries(1) Amount recognized on the non-consolidated financial statements for the fiscal year
Allowance for doubtful receivables ¥9,568 million(2) Information regarding important accounting estimates for the item identified(i) Overview
The Company provides Oki Hong Kong, Ltd. (hereinafter “OHL”), a consolidated subsidiary
which primarily engages in the material procurement and logistics management businesses in China,
with loans in the amounts of US$134 million and RMB216.5 million (¥22,098 million if converted
to Japanese yen based on the exchange rate as of the end of the fiscal year under review) as of theend of the fiscal year, and they are included in long-term loans receivable from subsidiaries andaffiliates. In addition, OHL has accounts receivable from Oki Electric Industry (Shenzhen) Co.,
Ltd. (hereinafter “OSZ”), which has accounts receivable from Oki Banking Systems (Shenzhen) Co.,
Ltd. (hereinafter “OBSZ”).
As described in the “Notes to Consolidated Financial Statements, Notes on Accounting
Estimates, 1. Estimate of recoverability of claims for which litigation is currently pending,” accounts
receivable from Shenzhen Yihua Computer Industrial Co., Ltd. (hereinafter “Yihua Industrial”) havebeen outstanding at OBSZ and, as a result, the payment of a similar amount from OBSZ to OSZ, andfrom OSZ to OHL remains unpaid. In light of such retention status, OHL recorded an allowancefor doubtful receivables against accounts receivable from OSZ in conjunction with an allowance for
doubtful receivables recorded by OBSZ for accounts receivable from Yihua Industrial. This
resulted in negative net worth at OHL at the end of the fiscal year, giving rise to a serious issue
regarding repayment of the loans provided by the Company.
(ii) Calculation method for the amount recognized on the non-consolidated financial statements for the
fiscal year and major assumptions to the calculation
The Company classifies the loans to OHL into doubtful accounts and recorded an allowancefor doubtful receivables for an estimated amount of loss up to an amount by which OHL’s liabilities
exceed its assets from the previous year, as a result of making judgment of OHL’s activities in thematerial procurement and logistics management businesses, management status, and ability to pay
comprehensively. The amount of US$71.655 million (¥9,568 million if converted to Japanese yen
based on the exchange rate as of the end of the fiscal year) was recognized at the end of the fiscal
year.
(iii) Impact on the non-consolidated financial statements for the next fiscal year
As the amount by which OHL’s liabilities exceed its assets changes in tandem with theallowance for doubtful receivables recorded by OBSZ for accounts receivable from Yihua Industrial,
the estimated amount of loss may vary significantly subject to the status of the appeal by OBSZ.
2.

Estimate of total costs used to measure the progress of the performance obligation in the recognition ofrevenue(1) Amount recognized on the non-consolidated financial statements for the fiscal year
Among the revenue associated with the performance obligation satisfied over a certain period,
revenue recorded based on the progress calculated by the ratio of the incurred costs to the estimatedtotal costs was ¥37,971 million (including revenue for projects completed before the end of the fiscal
year). Of which, an amount recognized for the fiscal year in relation to construction projects that- 89 -

(Translation)
were work-in-progress at the end of the fiscal year is ¥22,851 million.
(2) Information regarding important accounting estimates for the item identified
The calculation method for the amount in (1) is the same as the one described in the Notes toConsolidated Financial Statements, “Notes on Accounting Estimates 2. Estimate of total costs used
to measure the progress of the performance obligation in the recognition of revenue.”
3.

Future cash flows estimated based on the determination to recognize the impairment loss
(1) Amount recognized on the non-consolidated financial statements for the fiscal year
Property, plant and equipment¥33,743 million
Intangible assets¥14,228 million
Long-term prepaid expenses¥1,289 million(2) Information regarding important accounting estimates for the item identified(i) Calculation method for the amount recognized on the non-consolidated financial statements for the
fiscal year and major assumptions to the calculation
The Company determines whether to recognize the impairment loss of the given asset or asset
group, when there is an indication that the asset or asset group may be impaired (hereinafter“indication of impairment”) at the end of a fiscal year. An indication of impairment is recognizedwhen a loss or negative cash flow caused by marketing activities in which the asset or asset group is
used is ongoing or likely to be ongoing, or when a significant downturn of the business is identified.
Whether to recognize the impairment loss of the asset or asset group with indication of impairment
is determined by comparing the total future cash flow before discount obtained from the asset or
asset group (including net sales value in future of assets other than main assets) and the book value,
and if the former is smaller than the latter, the Company recognizes the impairment loss.
The Company determines that indication of impairment is found company-wide, includingcommon assets. However, impairment loss has not been recognized because the company-wide total
future cash flow before discount, which was calculated based on the projected profit and loss in thenext fiscal year and onwards, is greater than the book value of the Company’s assets. Major
assumptions used to estimate the future cash flow before discount are net sales and expenses in theMedium-Term Business Plan 2025. The business plan enlists projections of future net sales andexpenses, etc., based on management strategy taking into account past performance and the current
business environment.
(ii) Impact on the non-consolidated financial statements for the next fiscal year
It is possible that impairment loss may be reported in the next fiscal year if a significant change
occurs in the business environment, which necessitates a downward revision of the above assumption,
resulting in the company-wide total future cash flow before discount calculated based on the
projected future profit and loss becoming smaller than the book value of the Company’s assets.

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(Translation)
Notes to Non-consolidated Balance Sheet
1. Assets provided as collateral
Investments in securities
Liabilities collateralized by the abovementioned assets
Short-term borrowings
2.

¥4,671 million¥3,500 million

Guarantee liabilities:
The Company provides guarantees for bank borrowings made by employees, and subsidiaries andaffiliates as shown below.
OKI BRASIL INDÚSTRIA E COMÉRCIO DE PRODUTOS
E TECNOLOGIA EM AUTOMAÇÃO LTDA.
Oki Europe Ltd.

OKI Circuit Technology Co., Ltd.
Oki Data Manufacturing (Thailand) Co., Ltd.
OKI INDIA PRIVATE LIMITEDOKI Crosstech Co., Ltd.
Three other entities:
Total:
3.

¥3,852 million(BRL146.930 million)¥2,483 million(GBP15 million)¥1,955 million¥734 million($5.5 million)¥725 million(INR444.846 million)¥678 million¥638 million¥11,067 million

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

Notes to Non-consolidated Statement of Operations
Transactions with subsidiaries and affiliates
Net sales:
Purchases:
Non-operating transactions:
Notes to Non-consolidated Statement of Changes in Net Assets
Type and number of treasury stock as of the end of the fiscal year
Common stock:- 91 -¥30,242 million¥1,161 million¥43,345 million¥67 million¥36,397 million¥83,228 million¥10,426 million

598 thousand shares

(Translation)
Notes to Deferred Tax Accounting
1. Major factors giving rise to deferred tax assets and liabilities
Deferred tax assets
Loss carry forwards
Nondeductible write-downs of shares of subsidiaries and affiliates
Nondeductible retirement benefits
Adjustments of losses on transfers among consolidated subsidiaries
Allowance for doubtful receivables
Nondeductible accrued bonuses
Nondeductible write-downs of inventories
Provision for loss on construction contracts
OthersSubtotal deferred tax assets
Valuation allowance
Total deferred tax assets

2.

¥14,919 million¥11,113 million¥5,042 million¥3,418 million¥2,951 million¥1,258 million¥1,163 million¥777 million¥4,242 million¥44,883 million¥(40,954) million¥3,928 million

Deferred tax liabilities
Gain on valuation of investment securities
Prepaid pension cost
Nondeductible unrealized gain on contribution of securities to thepension trust
OthersTotal deferred tax liabilities¥(556) million¥(12,981) million

Net deferred tax assets¥(9,052) million¥(5,723) million¥(4,786) million¥(1,916) million

Accounting process of corporate tax and local corporate tax or accounting process of tax effect accounting
relating thereto
The Company has applied the group tax sharing system from the fiscal year under review. In
accordance with “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing
System” (ASBJ PITF No. 42, August 12, 2021), the Company has performed the accounting process of thecorporate tax and local corporate tax or the accounting process of the tax effect accounting relating thereto
and has disclosed such information.

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

Subsidiary

Subsidiary

Subsidiary

Name of company, etc.

OKI Crosstech Co.,Ltd.

OKI Software Co.,Ltd.

Oki Electric Cable
Co., Ltd.

Location

Chuo-ku,Tokyo

Warabi,
Saitama Pref.

Kawasaki(Kanagawa)

Votingright ratio

Relationship withrelated party

Description oftransactions

Transaction
amount(mil. yen)Account item

Endingbalance(mil. yen)Equipment work,
designing, construction
and maintenance of
telecommunication,
firefighting and otherfacilities, maintenance,¥2,001 million
operations andtechnical support for
ICT equipment andsystems, and sales ofrelated equipment andsupplies(Direct)
100%

Supply products, etc.,
purchase of services

Borrowings of
funds

–

Deposits
received

13,512¥400 million

Development, design,
manufacture andmaintenance ofsoftware andembedded software,system building
services, SI/solution
services, consulting,outsourcing and salesof informationequipment(Direct)100%

Production ofsoftware on a contract
basis, etc.

Purchase ofservices

14,017

Accounts
payable,
trade

3,814

¥4,304 million

Manufacture and salesof electrical wire,
electronic equipment
parts, metal products
and synthetic resinmaterial processed
goods(Direct)
100%

Purchase of products

Borrowings of
funds

–

Deposits
received

3,577(Direct)
100%

Purchase of products
and services, lendingof funds

Lending of
funds

5,652

Short-term
loans
receivable

6,225

31,637

Accounts
payable,
trade

5,526

23,406Long-term
loans
receivable
fromsubsidiaries
and affiliates

22,098

CapitalBusiness

Subsidiary

OKI Nextech Co.,
Ltd.

Tokorozawa(Saitama)¥400 million

Development, design,
manufacture, sales andmaintenance of
information andcommunications
devices, industrial
electronic devices,
medical electronicequipment and otherelectronic devices aswell as electronic parts

Subsidiary

Oki Data
Manufacturing(Thailand) Co., Ltd.

Thailand420 million
Thai baht

Manufacture of
information processing
equipment(Direct)
100%

Purchase of products

Purchase of
products

Subsidiary

Oki Hong Kong,
Ltd.

Hong Kong

US$10.292
thousandHoldings company,
material procurement(Direct)
100%

Supply products,
etc., lending of funds

Lending offunds

Notes:
1. The transaction amount excludes consumption tax, etc., while the ending balance includes consumption tax, etc.
2. Conditions of transactions and policy in determining conditions(1) The Company determines conditions regarding purchase of services and purchase of products based on market prices andconducting negotiation.
(2) The Company determines the interest rate for the lending of funds by taking the market rate of interest into consideration.
However, for some subsidiaries, the Company determines the said interest rate by taking the financial position of thesubsidiaries. Transaction amount shows the average balance during the fiscal year because the transactions are repetitive.
3. An allowance for doubtful accounts of ¥9,568 million has been recorded for loans to Oki Hong Kong, Ltd. Furthermore, an allowancefor doubtful accounts of ¥454 million has been provisioned this fiscal year.

Notes to Per-share Information
1. Net assets per share:¥841.20
2. Loss per share:¥72.63- 93 -

(Translation)
Notes on Revenue Recognition
Notes on the information to understand the revenue from contracts with customers are omitted since thesame contents are described in “Notes on Revenue Recognition” in the Notes to Consolidated Financial
Statements.
Explanatory notes on Company to Which Consolidated Dividend Regulations Apply
The Company will be a company to which consolidated dividend regulations apply after the final day of
the fiscal year under review becomes the final day of the final fiscal year.

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(Translation)

Transcript of Accounting Auditors’ Report

Independent Auditors’ Report
May 19, 2023
To: Board of Directors
Oki Electric Industry Co., Ltd.
PricewaterhouseCoopers Aarata LLC
Tokyo Office
Tsuyoshi Saito,
Engagement Partner, Certified Public Accountant
Takeaki Ishibashi,
Engagement Partner, Certified Public Accountant
Yoshihiro Shiribiki,
Engagement Partner, Certified Public Accountant
Audit opinion
We have audited the non-consolidated financial statements—the non-consolidated balance sheet, the non-consolidated statementof operations, the non-consolidated statement of changes in net assets and notes to the non-consolidated financial statements—
and its supporting schedules (“Financial Statements, etc.”) of Oki Electric Industry Co., Ltd. for the 99th term from April 1, 2022
to March 31, 2023 in accordance with Article 436, paragraph (2), item (i) of the Companies Act.
We concluded that the Financial Statements, etc. fairly present in all aspects of Oki Electric Industry’s assets and income or loss
in accordance with corporate accounting standards generally accepted in Japan.
Basis for audit opinion
We have conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under thosestandards are further described in the “Responsibility of auditor for the audit of the Financial Statements, etc.” section of ourreport. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit in Japan,
and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
The other information refers to the business report and its supplementary schedules. Management is responsible for preparing
and disclosing the other information. In addition, the Audit & Supervisory Board Members and the Audit & Supervisory Board
are responsible for overseeing the Directors’ performance of duties within the maintenance and operation of the reporting process
for the other information.
The scope of our audit opinion on the non-consolidated financial statements does not include the content of the other information,
and we do not express an opinion regarding the other information.
Our responsibility in auditing the non-consolidated financial statements is to read through the other information, and in the processof reading it, we examine whether there are material differences between the other information and the non-consolidated financial
statements or the knowledge we have gained in the auditing process, and we also pay attention as to whether there are any
indications in the other information of material errors besides such material differences.
If we determine there to be material errors in the other information based on the work we have performed, we are required toreport those facts.
There are no matters to report regarding the other information.
Responsibility of management, Audit & Supervisory Board Members and the Audit & Supervisory Board for preparing Financial
Statements, etc.
Oki Electric Industry’s management is responsible for preparing and presenting fairly the Financial Statements, etc. in accordancewith corporate accounting standards generally accepted in Japan. This includes designing and operating internal control that the
management determines necessary to prepare and fairly present the Financial Statements, etc. that are without material
misstatement due to fraud or errors.
In preparing the Financial Statements, etc., management is responsible for assessing whether it is appropriate to prepare the
Financial Statements, etc. with the assumption of a going concern, and in accordance with corporate accounting standards
generally accepted in Japan, for disclosing, as necessary, matters related to going concern.
Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the Directors’
performance of duties within the maintenance and operation of the financial reporting process.
Responsibility of auditors for the audit of the Financial Statements, etc.
Our responsibilities are to obtain reasonable assurance about whether the Financial Statements, etc. as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that expresses our opinion on the Financial
Statements, etc. based on our audit from an independent point of view. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users of
the Financial Statements, etc.

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(Translation)
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintain professional
skepticism throughout the audit process to perform the following:• Identify and assess the risks of material misstatement, whether due to fraud or error, and design and perform audit procedures
responsive to those risks. Selecting audit procedures to be applied is at the discretion of the auditor. Obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion.
• When auditing the Financial Statements, etc., obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances in making risk assessments, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control.
• Evaluate the appropriateness of accounting policies used by management and their method of application, as well as thereasonableness of accounting estimates made by management and the appropriateness of related notes thereto.
• Conclude on the appropriateness of preparing the Financial Statements, etc. with the assumption of a going concern bymanagement, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the notes to the Financial Statements, etc. or, if
the notes to the Financial Statements, etc. on material uncertainty are inadequate, to express a qualified opinion with exceptions
on the Financial Statements, etc. Our conclusions are based on the audit evidence obtained up to the date of our auditor’sreport. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate whether the presentation of the Financial Statements, etc. and notes thereto are in accordance with corporate
accounting standards generally accepted in Japan, as well as evaluate the presentation, structure, and content of the Financial
Statements, etc., including the related notes thereto, and whether the Financial Statements, etc. fairly present the underlying
transactions and accounting events.
We report to the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit process, and other matters required by auditing standards.
We also provide the Audit & Supervisory Board Members and the Audit & Supervisory Board with a statement that we havecomplied with relevant ethical requirements in Japan regarding independence, and communicate with them all relationships andother matters that may reasonably be deemed to bear on our independence, and where applicable, related safeguards in order toeliminate or reduce obstruction factors.
Conflict of interest
We or engagement partners have no interests in the Company, which should be stated in compliance with the Certified Public
Accountants Act.

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(Translation)

Transcript of Audit & Supervisory Board’s Report

Audit & Supervisory Board’s Report
We, the Audit & Supervisory Board, have prepared upon consultation this Audit Report based on reports compiled by each Audit & Supervisory
Board Member with respect to Directors’ performance of their duties during the 99th fiscal year from April 1, 2022 to March 31, 2023, as follows:
1. Auditing methods used by Audit & Supervisory Board Members and the Audit & Supervisory Board, and details of audit(1) The Audit & Supervisory Board specified an audit policy, compiled audit plans and received reports from each Audit & Supervisory Board
Member on the status of implementation and results of audits and also received reports from Directors and accounting auditors on the statusof the execution of their duties and asked them for explanations as needed.
(2) Each Audit & Supervisory Board Member, according to the audit standards, policy and plans set up by the Audit & Supervisory Board, has
maintained good communications with Directors, the internal audit division and other employees and strived to collect information andimprove the audit environment and conducted an audit by following the methods described below:(a) We attended the 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 as necessary, perused the documents whereby the important decisions
were made, and examined business and financial conditions at the head office and principal operating offices. With respect to thesubsidiaries of the Company, we have maintained good communications and exchanged information with Directors, Audit & Supervisory
Board Members and others and received reports on business conditions from the subsidiaries as needed.
(b) In addition, we have periodically received reports from Directors and employees, among others, required explanation when necessary,and made opinions with regard to the status of operations and the systems established thereon (internal control systems) made by the
Board of Directors concerning the establishment of systems defined in Article 100, paragraph (1) and paragraph (3) of the Regulations
for Enforcement of the Companies Act as necessary for ensuring compliance with laws and the Company’s Articles of Incorporation in
the performance of duties by Directors, described in the Business Report, and for ensuring appropriateness of duties of corporate groupconsisting of joint stock company and its subsidiaries. With respect to the internal controls over financial reporting, we have received
reports on the internal control evaluation and status of the audits from the Directors, etc. and the PricewaterhouseCoopers Aarata LLC,
and asked them for explanations as necessary.
(c) We have monitored and verified whether the accounting 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 the business report for the said fiscal year and their supplementary schedules, financial
statements for the said fiscal year (balance sheet, statement of operations, statement of changes in shareholders’ equity, and notes to nonconsolidated financial statements), their supplementary schedules and consolidated financial statements (consolidated balance sheet, consolidated
statement of operations, 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(a) 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.
(b) With respect to the Directors’ performance of their duties, we have found neither undue transactions nor material facts that violate relevantlaws and regulations or the Company’s Articles of Incorporation.
(c) We consider that the details of the resolution made by the Board of Directors concerning internal control procedures are proper. With
respect to the details described in the Business Report and the Directors’ performance of their internal control duties, we have found noissues to be pointed out. Furthermore, regarding internal controls over financial reporting, as of the creation of this audit report, wehave received reports from Directors, etc. and PricewaterhouseCoopers Aarata LLC to the effect that there are no significant deficiencies
that should be disclosed.
(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, PricewaterhouseCoopers Aarata LLC, areproper.
(3) Results of audit of consolidated financial statements
We consider that the auditing methods and results of the Company’s Accounting Auditors, PricewaterhouseCoopers Aarata LLC, areproper.
May 19, 2023
The Audit & Supervisory Board, Oki Electric Industry Co., Ltd.
Toshiya Hatakeyama, Standing Audit & Supervisory Board Member
Toshiyuki Yokota, Standing Audit & Supervisory Board Member
Hideo Shiwa, Outside Audit & Supervisory Board Member
Ryuichi Makino, Outside Audit & Supervisory Board Member
Yoshihiro Tsuda, Outside Audit & Supervisory Board Member- 97 -