Messages from the CEO

Message dated February 4, 2011

To Our Shareholders and Investors

I wish to express my gratitude for the many courtesies extended by our stakeholders.
On February 4, 2011, Oak Capital announced its revision to the FY 2010 full-year earnings projections at the Tokyo Stock Exchange. I would like to take this occasion to briefly comment on the essential points of this announcement as well as on the future course of our company.

Oak Capital's business strategy for FY 2010 called for the launch of investments in companies listed on the start-up markets and in medium-sized listed companies, aiming to support their corporate revival and growth.
In view of the domestic stock market's slump in the wake of the Greek fiscal crisis last May and other factors, we decided to adopt a prudent attitude to investment opportunities and roll back new investments during the first half of the present fiscal year. Since the second half, however, the stock market has rallied, smoothing the way for Oak Capital to actively engage in equity investments.
While the first two quarters have been limited in terms of investment recovery, we have seen an upward tendency from the third quarter with stock prices reflecting the market's positive response to the business results realized by several of our investment recipient companies as they continue to successfully implement growth strategies.

As a result, consolidated operating results have returned to the black during the third quarter. We continue to make every endeavor to collect on our investments and strive to achieve two straight years of revenue and profit growth.

While further expanding our investment model targeting emerging market and small-cap stocks, we have also begun to refine and bring our Medium-term Management Plan up to date by introducing new strategies that are not easily impacted by the external environment. We are currently developing this update and will announce further details as soon as we have mapped out a definite course.

I look forward to your continued cooperation and support in these endeavors.

Message dated January 4, 2011

To Our Shareholders and Investors

At the beginning of a brand-new year, I wish to first of all express my deep gratitude for the continuing support and patronage of our stakeholders.
I would also like to take this opportunity to reflect on the business environment and future perspective of our company.

Three years are about to elapse since the Lehman Brothers debacle. The financial crisis which originated in the U.S. has brought about a radical transformation of the economic structure. In its aftermath, fiscal and financial crises still continue to flare up periodically in Europe.

The year 2010, however, also saw the beginning of a growing trend as global enterprises of leading industrial countries including major Japanese companies got back on a growth path thanks to China, India and other developing nations sustaining the world economy. Last year, tail winds began to blow again in the M&A markets across the globe progressing as they were by a general improvement in business performance. For that reason, the year 2011 will very likely be defined as the first year marking a dynamic and genuine pickup in economic activity centered on Asia.

The era in which such indicators as economic growth rate and GDP were used as a surefire yardstick of national strength is coming to an end. Today, national boundaries limiting a company's clientele, market size or scope of activities are disappearing. A barrier-free environment is opening up to companies expanding their presence around the world without fixating on economic growth targets. Even domestic demand-oriented companies are starting to reap the benefits of a borderless marketplace by utilizing creativity and developing sound growth scenarios. Corporations know no national borders and the shared vision of a world as one unified entity is increasingly becoming a reality.

Last year, companies that newly listed on the China stock markets raised a total of 10 trillion yen. On the other hand and quite regrettably, new capital raised by the 22 companies that went public in Japan was only about one tenth of this amount. Stimulated by the recent improvement in the business performance of leading domestic companies, however, a growing number of startups and medium-sized firms are staging major strategy shifts and overcoming a late start in mapping out growth strategies. By capitalizing on the business chances created by the growth strategies of leading companies and on opportunities associated with developing nations, I anticipate that this year will see an economic resurgence and a new flowering of business activity.

Investment banks play a prominent role in underwriting private placements of new shares by corporations. It is expected that demand for investment financing required for the execution of growth strategies will continue to expand and that capital procurement activity will consequently brisk up.
Oak Capital has been engaged in investments in domestic emerging market stock since 2010 having placed high expectations on this market which truly abounds with emerging companies that hold considerable potential for growth.
Underwriting private placements, however, is not the only role that is being fulfilled by our company. Oak Capital additionally provides growth strategy support. More specifically, we assist investee companies in a variety of ways including business strategy formulation and operational support seeing to it that they can continue develop without missing out on precious growth opportunities. Oak Capital believes its mission is to play a role in the continued value creation of such companies.

In closing, I would like to ask for your continued support and encouragement towards our company.