FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of June, 2007
Commission File Number 2 - 68279
RICOH COMPANY, LTD.
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(Translation of Registrant's name into English)
13-1, Ginza 8-Chome, Chuo-ku, Tokyo 104-8222, Japan
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(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.)
Form 20-F X Form 40-F __
(Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): __ )
(Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): __ )
(Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes __ No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-__)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Ricoh Company, Ltd.
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(Registrant)
By: /S/ Etsuo Kobayashi
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Name: Etsuo Kobayashi
Title: Corporate Senior Vice President
General Manager of Personnel
Division
Date: June 5, 2007
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(TRANSLATION)
(Securities Code: 7752)
June 5, 2007
NOTICE OF
107TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
Dear Shareholder,
The Company would hereby like to inform you that the 107th ordinary general
meeting of shareholders will be held as follows, and would be grateful if you
could attend the meeting.
Those who will not be able to attend the meeting on the day are kindly
requested to consider appended "Reference Material for General Meeting of
Shareholders" and exercise your voting right in writing or via the Internet no
later than 5:30 p.m., Tuesday, June 26, 2007.
[Exercise of voting rights in writing]
Please indicate your "approval or disapproval" for each of the proposals on the
voting form enclosed herewith and return the form by the above-mentioned
deadline.
[Exercise of voting rights via the Internet]
Please access the website designated by the Company for the Exercise of
Voting Rights (http://www.web54.net), use "Voting right exercise code" and
"Password," both shown in the voting form and enter your approval or
disapproval for each of the proposals following the instructions displayed on
the screen.
When exercising your voting right through the Internet website, please read
"Exercise of Voting Rights via the Internet" on page 48.
Yours faithfully,
Shiro Kondo,
Representative Director,
President and Chief Executive Officer
Ricoh Company, Ltd.
1-3-6 Nakamagome, Ohta-ku, Tokyo
1. DATE AND TIME: Wednesday, June 27, 2007, from 10:00 a.m.
2. VENUE: Ricoh's registered head office: 1-3-6 Nakamagome,
Ohta-ku, Tokyo
3. PURPOSE:
ITEMS TO BE REPORTED: 1. The Business Report, Consolidated Financial
Statements and the results of auditing consolidated
financial statements by account auditors and the
Board of Corporate Auditors for the fiscal year
ended March 31, 2007 (from April 1, 2006 to March
31, 2007)
2. The Non-Consolidated Financial Statements for the
fiscal year ended March 31, 2007 (from April 1,
2006 to March 31, 2007)
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ITEMS TO BE RESOLVED:
Agenda 1: Appropriation of retained earnings
Agenda 2: Election of one (1) Corporate Auditor
Agenda 3: Election of one (1) substitute Corporate Auditor
Agenda 4: Payment of retirement allowances for Directors and
Corporate Auditors following the abolishment of the
retirement allowance system
Agenda 5: Revision of remuneration for Directors
Agenda 6: Payment of bonuses to Directors
4. TREATMENT OF VOTING RIGHTS
(1)When voting rights were exercised both in writing and via the Internet,the
vote arrived later shall be deemed effective. However, if votes arrive on
the same day, the vote registered via the Internet shall be deemed effective.
(2)When voting rights are exercised via the Internet more than once, the last
vote shall be deemed effective.
Notes:
1. Shareholders are requested to fill out and submit the appended voting form
at the reception desk when attending.
2. If there is any revision to Reference Material for General Meeting of
Shareholders, Business Report, Consolidated and Non-consolidated Financial
Statements, it will be notified on the Company's website
(http://www.ricoh.co.jp/IR/).
This English translation is an abridged version of the original notice in
Japanese. In the event of any discrepancy, the Japanese version shall prevail.
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TO OUR SHAREHOLDERS
I would like to take this opportunity to express our sincere appreciation for
our shareholders' continuous support to us in delivering our business report
for 107th business term, from April 1, 2006 to March 31, 2007.
Under the 15th Medium-term Business Plan, started in the fiscal year ended
March 31, 2006, the Ricoh Group strove to achieve a further growth and
development by reinforcing its corporate competitiveness through "creation of
new customer values" and "highly efficient business operations." By doing this,
we aim to meet the expectations of our shareholders.
Against the backdrop, consolidated net sales rose 8.4% year on year to 2,068.9
billion yen in the fiscal year ended March 31, 2007. The increase is
attributable mainly to strong sales of color multifunction printers (MFPs) and
laser printers, at home and abroad.
Net income increased sharply 15.1% to post record-high figure of 111.7 billion
yen, due chiefly to a rise in high-value added products, effects of continuous
cost reductions and structural reform implemented by the previous fiscal year.
With regard to dividends, an interim dividend of 13 yen per share is already
disbursed and a dividend of 15 yen per share, up 3 yen per share from a year
earlier, at the end of the term will be proposed (total of 28 yen for the
fiscal year) at the 107th Ordinary General Meeting of Shareholders.
It is true that there are various uncertain factors such as economic trends
and foreign exchange fluctuations, but the Ricoh Group is determined to do the
utmost efforts to achieve consolidated net sales of 2.25 trillion yen and net
income of 117 billion yen in the fiscal year ending March 31, 2008.
We look forward to your continuous support and encouragement to the Company
from now on.
Sincerely,
June 2007
Masamitsu Sakurai,
Chairman of the Board and
Representative Director
Shiro Kondo,
Representative Director,
President and Chief Executive Officer
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Reference Documents Attached to Notice of 107th Ordinary General Meeting of
Shareholders
BUSINESS REPORT FOR 107TH BUSINESS TERM
(April 1, 2006 to March 31, 2007)
(The following is an unofficial English translation of the Reports for the
107th Fiscal Year of the Company. The Company provides this translation for
your reference and convenience only and without any warranty as to its accuracy
or otherwise.)
1. STATUS OF THE RICOH GROUP
(1) OPERATING CONDITIONS FOR THE FISCAL YEAR UNDER REVIEW
(I) Operating progress and results
- Overview
In the fiscal year under review, the Japanese economy achieved steady growth
thanks to continued strong capital expenditure by companies. The U.S. economy
expanded moderately backed by steady consumer spending and employment
situation, despite the uncertain outlook. In Europe, the economy remained
strong due to balanced growth in domestic and external demand. Meanwhile, the
economy continued growing at a high rate in Asia, mainly China and India.
Under such circumstances, the Ricoh Group intends to be the company that gains
most from the 21st century. Based on this group vision, we will continue to
contribute both to productivity improvement and also to knowledge creation for
individuals working anytime, anywhere. This approach will enable us to gain the
utmost trust of our customers and continue to grow and develop our business.
Accordingly, our proactive approach encompasses not only products and services
for traditional office setups, but also customers working in a broadband
environment.
In terms of Office Solution business - our core competence - we in the Ricoh
Group have made every possible effort since the inception of our 13th
medium-term management plan to move beyond the manufacture and retail of
equipment such as copiers and printers so that we may overhaul our operational
structure, thus enabling us to support our customers in their efforts to
improve or enhance productivity through our offering.
In the 14th medium-term management plan, we defined our principal strategy as
"the realization of TDV, thereby broadening our revenue and earning framework,"
as we recognize that efficient and effective Input/Output (I/O), storage, and
searching of TDV (i.e., total document volume), which includes printed material
in addition to photocopies, will become a pressing issue for our customers.
While there are no changes to the direction of business structure reform and
principal strategy of the Ricoh Group in the 15th medium-term management plan,
started in the fiscal year ended March 31, 2006, we will aim to increase our
corporate value by more than ever addressing issues from the customer's
standpoint and continuing to provide values that meet customers' expectations.
In the Office Solutions segment, in particular, we are confident that we
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can further solidify our business foundation by taking utmost advantage of the
abilities and strengths of the Ricoh Group, such as the comprehensive product
line, customer rapport through sales and service, ability to provide solutions,
global operations, image processing technology, and image processing and
merging technology, to respond to the diverse needs of even greater range of
customers.
In the Office Solutions segment, we have identified "printing" as an area that
presents an outstanding opportunity for growth. Consequently, we will shift a
higher portion of our business resources to this area. Namely, we will continue
to advance more than ever before such printing solutions as BC (black-color)
conversion and TCO (total cost of ownership) reduction solutions in the office,
enter the high-end production printing market, boost low-end products and
expand the business domain and size. Furthermore, we will revamp our sales
system solutions and solutions platform in order to promote document solution,
which enables improved document workflow, and to capture a greater share of
major customers, particularly major global accounts.
On the other hand, we will allocate greater business resources to promising
businesses in the Industrial Products segment. In addition, we will seek for
greater business shares of both Office Solutions and Industrial Products
segment in emerging markets.
As technological differentiation is the key to creating customer value in each
business and increasing profitability, we will continue our aggressive R&D
activities to boost our technical power.
The following shows our achievements in the basic policies during this fiscal
year.
In the Office Solutions segment, we have continuously introduced new
multifunctional color printers and color laser printers in order to provide
more comprehensive product line. We launched the imagio MP C4500/C3500 Series
(sold overseas as Aficio MP C4500/C3500) as part of our multifunctional color
printer line. This new printer cuts total energy consumption by approximately
50% compared with conventional models thanks to our unique energy-saving
technology, Color QSU. We also launched the IPSiO SP C811 Series (sold overseas
as Aficio SP C811DN), a color laser printer for high-speed color printing (A4,
horizontal input tray) at 40 pages per minute (ppm) that boasts superior
productivity and environmental performance. We have also launched the imagio MP
C3000/C2500 Series (sold overseas as Aficio MP C3000/C2500) and the imagio MP
C1500 (sold overseas as Aficio MP C615C), both popular models in the domestic
market, on the international market. Launching these next-generation color
copiers and printers has strengthened our product lines and gained us a large
share of the color copier/multifunctional printer markets both in Japan and
overseas.
We further enhanced our product lines in the production printing market with
the release of the IPSiO SP 9100Pro-HG/IPSiO SP 8100-HG Series, a mainframe
system printer. Employing our newly developed printing protocol, the Ricoh Host
Print Protocol, it offers superior reliability to meet open system environment
as well as distributed printing requirements. We forged an agreement with IBM
Corporation in January 2007 that will enable us to expand our operations in
this market through a joint venture known as InfoPrint Solutions Company (to
become Ricoh's wholly-owned subsidiary in three years). This new company will
combine Ricoh's superior hardware and software production and development
capabilities with IBM's service, software and IT solution capabilities to
provide our customers with higher value products.
-5-
In the low-end business printer market, we released the IPSiO SP C411 Series
(sold overseas as Aficio SP C411DN). It is a high-speed, color laser printer
with versatile paper handling capabilities that can meet various business
needs. We also launched the IPSiO GX Series (sold overseas as Aficio GX), a
printer that incorporates Ricoh's advanced Gel Jet technology for higher
resolution and faster printing. These new models enable us to continue opening
up new low-end business printer markets.
As for the promoting our printing solution, we have developed business on a
global scale by proposing TCO reduction solutions utilizing copiers and
printers together and earning high reputation for our worldwide support and
services. In addition, in developing document solution in order to improve
workflow, we have provided software tools to link multifunctional printers with
host systems, improved the support structure of technology centers to propose
the optimum environment and support the introduction for those systems in
Japan, the Americas and Europe, and strengthened the sales structures for
solutions.
We have been allocating our management resources in the Industrial Products
segment to potential growth markets and businesses. Our semiconductor business
alone has significantly expanded its operational base of sales, design and
development in Asia.
We have also continued strengthening our operational foundation during this
term in line with our growth strategy.
In sales and services, we acquired the European operations of Danka Business
Systems PLC for office equipment sales and services. We continue to enhance our
sales and service networks both in Japan and overseas.
In the area of research and development, we continue to enhance designing and
development processes at the Ricoh Technology Center which was established to
consolidate designing and development functions under the cross-functional
development structure. This has allowed us to achieve significant improvement
in development efficiency.
In the fiscal year under review, consolidated net sales rose 8.4% year on year
to 2,068.9 billion yen. Operating income also increased 17.4% to 174.3 billion
yen primarily due to the increased sales of value-added high-margin products
and the effect of ongoing cost management controls. Income before income taxes
from continuing operations was up 14.2% from the previous year to 174.5 billion
yen, net income from continuing increased 11.8% to reach 106.2 billion yen, and
net income for all business operations including discontinued business
operations was up 15.1% to 111.7 billion yen.
* CONSOLIDATED SALES BY CATEGORY (CONSOLIDATED BASIS)
Category Sales (billions of yen) Percentage of total Change (%)
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Imaging Solutions 1,580.1 76.4 9.2
Network System
Solutions 194.3 9.4 2.0
Office Solutions 1,774.4 85.8 8.4
Industrial Products 133.3 6.4 10.6
Other 161.0 7.8 6.4
Total 2,068.9 100.0 8.4
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Japan 1,002.2 48.4 3.7
Overseas 1,066.6 51.6 13.1
The Americas 426.4 20.6 10.1
Europe 507.1 24.5 16.6
Other 133.0 6.5 10.1
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OFFICE SOLUTIONS (up 8.4% year on year to Yen 1,774.4 billion)
Net sales in the Office Solutions segment which consists of imaging solutions
and network system solutions increased by 8.4% from the previous corresponding
period, to Yen 1,774.4 billion despite stiff competition against other
manufacturers regarding the color equipment and solution business.
Imaging Solutions (up 9.2% year on year to 1,580.1 billion yen)
---------------------------------------------------------------
[CHART APPEARS HERE]
Trends in consolidated net sales (billions of yen)
FY 2006 1,446.6
FY 2007 1,580.1
FY 2008(E) 1,737.3
Imaging Solution: Digital copiers, color copiers, analog copiers, digital
duplicators, facsimile machines, diazo copiers, scanners,
multi-functional printers (MFP), printers and software
Sales of MFPs and other printers, mainly color models, rose due to increase
in product lineups and enhancement of solutions sales structure.
Particularly, sales of color MFPs increased substantially in Japan and
overseas thanks to the introduction of new-generation color models. As a
result, sales at this business were Yen 1,580.1 billion, up 9.2% from a year
earlier.
Network System Solutions (up 2.0% year on year to Yen 194.3 billion)
--------------------------------------------------------------------
[CHART APPEARS HERE]
Trends in consolidated net sales (billions of yen)
FY 2006 190.5
FY 2007 194.3
FY 2008(E) 201.0
Network System Solution: Personal computers, PC servers, network systems and
network related software
The sales of IT services increased due to the expansion of solution
business. The sales of personal computers and PC servers also increased
slightly in the domestic market. As a result, sales in this category
increased by 2.0% from the previous corresponding period, to Yen 194.3
billion.
-7-
INDUSTRIAL PRODUCTS (up 10.6% year on year to Yen 133.3 billion)
-----------------------------------------------------------------
[CHART APPEARS HERE]
Trends in consolidated net sales (billions of yen)
FY 2006 120.6
FY 2007 133.3
FY 2008(E) 143.3
Industrial Products: Thermal media, optical equipments, semiconductors,
electronic component and measuring equipments
Sales of semiconductors, thermal media, electronic component and measuring
equipments increased. As a result, sales at this business rose 10.6% from
the previous year to Yen 133.3 billion.
OTHER (up 6.4% year on year to Yen 161.0 billion)
-------------------------------------------------
[CHART APPEARS HERE]
Trends in consolidated net sales (billions of yen)
FY 2006 151.3
FY 2007 161.0
FY 2008(E) 168.4
Other: Optical discs and digital camera
Sales of digital cameras increased at home and abroad, and financing
services was brisk in the domestic market. As a result, sales from this
sector posted Yen 161.0 billion, up 6.4% from a year earlier.
(II) PLANT AND EQUIPMENT INVESTMENT
In the fiscal period under review, the Ricoh Group invested a total of 85.8
billion yen (including an investment of 26.0 billion yen by the Company) in
plant and equipment, mainly comprising the following.
(a)Major equipment and facility expansions completed during the fiscal year:
Electronic components plant (Yashiro Plant, Ikeda Plant)
Equipment-related supplies plant (Numazu Plant)
(b)Major equipment and facility expansions in progress in the fiscal year:
Equipment-related supplies plant (Numazu Plant)
(III) FUND PROCUREMENT
On December 7, 2006, the Company issued "Euro Yen Zero Coupon Convertible Bonds
due 2011 (bonds with stock acquisition rights) ". The Company will use
primarily for repayment of a portion of the Company's corporate bonds, as well
as for capital investment for implementing growth strategy. Outline of the bond
is as follows:
.. Total principal amount of issue of the Bonds: Yen 55,275 million plus the
aggregate
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principal amounts of this bond with regard to the substitute bond with
stock acquisition rights
.. Conversion price: Yen 2,800
.. Redemption date: December 7, 2011
(2) STATUS OF ASSETS AND PROFIT/LOSS IN THREE BUSINESS YEARS
* Transition of assets and profit/loss of the Ricoh Group
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Fiscal year Fiscal year Fiscal year Fiscal year
ended ended ended ended
Items March 2004 March 2005 March 2006 March 2007
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Net sales (billions of yen) 1,773.3 1,807.4 1,909.2 2,068.9
Income from continuing operations before
income tax (billions of yen) 138.4 130.9 152.7 174.5
Net income (billions of yen) 91.7 83.1 97.0 111.7
Net income per share (yen) 123.63 112.64 132.33 153.10
Total assets (billions of yen) 1,852.7 1,953.6 2,041.1 2,243.4
Net assets (billions of yen) 795.1 862.9 960.2 1,070.9
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Notes:
1. The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the U.S.
2. As a result of the sale of a business, the operating results from the
discontinued operations have been reclassified in accordance with Statement of
Financial Accounting Standards No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets."
3. Net income per share is calculated based on the average number of shares
outstanding during the fiscal year, from which the number of shares of treasury
stock is deducted.
* Transition of assets and profit/loss of the Company
----------------------------------------------------------------------------------------------
Fiscal year Fiscal year Fiscal year Fiscal year
ended ended ended ended
Items March 2004 March 2005 March 2006 March 2007
----------------------------------------------------------------------------------------------
Net sales (billions of yen) 876.3 897.2 934.3 1,033.3
Ordinary income (billions of yen) 62.5 62.7 82.4 105.2
Net income (billions of yen) 58.5 41.9 55.0 71.9
----------------------------------------------------------------------------------------------
Net income per share (yen) 79.18 56.64 74.81 98.48
Total assets (billions of yen) 937.3 949.5 982.5 1,076.2
Net assets (billions of yen) 642.4 659.9 694.7 744.8
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Notes:
1. Net income per share is calculated based on the average number of shares
outstanding during the fiscal year, from which the number of shares of treasury
stock is deducted.
2. Beginning in the fiscal year under review, the Company adopted ASBJ
Statement No.5 "Accounting Standards for Presentation of Net Assets in the
Balance Sheets" and its Implementation Guidance-ASBJ Guidance No.8, "Guidelines
on Accounting Standards for Presentation of Net Assets in Balance Sheet."
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(3) STATUS OF MAJOR SUBSIDIARIES
* Status of major subsidiaries
Investment
Name Paid-in capital Ratio (%) Principle Business
------------------------------------------------------------------------------
Tohoku Ricoh Co., Ltd. 2,272 million JPY 100.0 Manufacturing of
office equipment
Ricoh Printing Systems, 5,000 million JPY 100.0 Manufacturing and
Ltd. sale of office
equipment
Ricoh Elemex Corporation 3,456 million JPY 55.9 Manufacturing of
office equipment
Ricoh Sales Co., Ltd. 622 million JPY 100.0 Sale of office
equipment
Ricoh Kansai Co., Ltd. 700 million JPY 100.0 Sale of office
equipment
Ricoh Technosystems Co., 2,128 million JPY 100.0 Maintenance service
Ltd. and sale of office
equipment
Ricoh Leasing Co., Ltd. 7,896 million JPY 51.1 General leasing
RICOH ELECTRONICS, INC. 27 million USD 100.0 Manufacturing of
office equipment and
related supplies
RICOH CORPORATION 286 million USD 100.0 Sale of office
equipment
LANIER WORLDWIDE, INC. 256 million USD 100.0 Sale of office
equipment
RICOH EUROPE B.V. 17 million EUR 100.0 Sale of office
equipment
NRG GROUP PLC 49 million GBP 100.0 Sale of office
equipment
RICOH ASIA INDUSTRY LTD. 180 million HKD 90.0 Sale of office
equipment
Notes:
1. The respective percentage of total investment ratio for Ricoh Elemex
Corporation, Ricoh Leasing Co., Ltd., Ricoh Electronics, Inc. and Lanier
Worldwide, Inc. include voting rights of those shares held by subsidiaries.
2. Ricoh Corporation and Lanier Worldwide, Inc. merged on April 1, 2007. In
association with the merger, Ricoh Corporation changed its name to Ricoh
Americas Corporation, while Lanier Worldwide, Inc. was liquidated.
3. On April 1, 2007, Ricoh Europe B.V. was split by function into two
companies: Ricoh Europe PLC and Ricoh Europe (Netherlands) B.V.
(4) ISSUES THE RICOH GROUP FACES
As customers' needs become ever more diverse, customers are no longer satisfied
with purchasing products or receiving ordinary service. The competition has
also intensified in the transition to color and in solutions marketing.
In order for the Ricoh Group to achieve growth and development with a focus on
these growth areas, it is essential that we boost our corporate competitiveness
by creating new values for customers and improving managerial efficiency.
In creating customer value, we will further implement "management based on CS
(customer satisfaction)," in which we aggressively cultivate new values more
than ever, and pursue our three core values such as "Simplify knowledge
creation", "Think solutions that fit" and "Harmonize with the environment ".
Specifically, we will further strive to support working customers in creating
knowledge, build the environment for their knowledge creation, pursue products
and services that are easy to use and thus fully used by customers, and offer
products and services with which customers can contribute to protect the global
environment.
Our effort will also continue in improving the efficiency of management to
enhance our profitability. Structural reform will streamline operational
processes and improve the earnings
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from each project. Furthermore, we will more carefully select projects and
concentrate resources to the selected projects to improve managerial
efficiency. In addition, we will make sure that our priority investment for the
group's growth up to now contributes to the company's earnings and will work
towards strengthening business foundation further.
The profit generated from such activities will be aggressively allocated to
investments in growth areas and technologies to further increase profits and
raise corporate values.
(5) MAIN BUSINESS (as of March 31, 2007)
Office Solutions Imaging Solutions
Digital copiers, color copiers, analog copiers, digital
duplicators, facsimile machines, diazo copiers, scanners,
multi-functional printers (MFP), printers and software,
etc.
Network System Solutions
Personal computers, PC servers, network systems and
network related software, etc.
Industrial Products Thermal media, optical equipments, semiconductors,
electronic component and measuring equipments, etc.
Other Optical discs and digital camera, etc.
(6) PRINCIPAL OFFICES AND PLANTS (as of March 31, 2007)
* Major domestic offices and plants
The Company (location) Subsidiaries (location)
-------------------------------------------------------------------------------
Head Office (Tokyo) Ricoh Optical Industries Co., Ltd.
(Iwate Pref.)
Omori Office (Tokyo) Tohoku Ricoh Co., Ltd. (Miyagi Pref.)
Software Research Center (Tokyo) Ricoh Printing Systems, Ltd. (Tokyo)
Shin-Yokohama Office (Kanagawa Pref.) Ricoh Elemex Corporation (Aichi Pref.)
Ricoh Technology Center (Kanagawa Ricoh Tohoku Co., Ltd. (Miyagi Pref.)
Pref.)
Research and Development Center Ricoh Sales Co., Ltd. (Tokyo)
(Kanagawa Pref.)
Atsugi Plant (Kanagawa Pref.) Ricoh Chubu Co., Ltd. (Aichi Pref.)
Hatano Plant (Kanagawa Pref.) Ricoh Kansai Co., Ltd. (Osaka Pref.)
Gotemba Plant (Shizuoka Pref.) Ricoh Chugoku Co., Ltd. (Hiroshima
Pref.)
Numazu Plant (Shizuoka Pref.) Ricoh Kyushu Co., Ltd. (Fukuoka Pref.)
Fukui Plant (Fukui Pref.) Ricoh Technosystems Co., Ltd. (Tokyo)
Ikeda Plant (Osaka Pref.) Ricoh Leasing Co., Ltd. (Tokyo)
Yashiro Plant (Hyogo Pref.)
* Major overseas offices
SUBSIDIARIES, ETC. (LOCATION) SUBSIDIARIES (LOCATION)
-------------------------------------------------------------------------------
RICOH CORPORATION (U.S.A.) RICOH ELECTROICS, INC. (U.S.A.)
RICOH EUROPE B.V. (Netherlands) RICOH UK PRODUCTS LTD. (U.K.)
NRG GROUP PLC (U.K.) RICOH INDUSTRIE FRANCE S.A.S. (France)
RICOH CHINA CO., LTD. (China) RICOH ASIA INDUSTRY (SHENZHEN) LTD.
(China)
RICOH ASIA PACIFIC PTE LTD (Singapore) SHANGHAI RICOH FACSIMILE CO., LTD.
(China)
Notes:
1. Ricoh Corporation changed its name to Ricoh Americas Corporation on April 1,
2007.
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2. On April 1, 2007, Ricoh Europe B.V. was split by function into two
companies: Ricoh Europe PLC and Ricoh Europe (Netherlands) B.V.
(7) STATUS OF EMPLOYEES (as of March 31, 2007)
(I) EMPLOYEES OF THE RICOH GROUP
Industry Common
Office solutions products Other businesses in the
Classification business business businesses group Total
----------------------------------------------------------------------------
Number of
employees 73,845 3,340 3,645 1,109 81,939
(II) EMPLOYEES OF THE COMPANY
Change from previous
Number of employees fiscal year Average age Average length of service
-------------------------------------------------------------------------------
11,303 37 (Decrease) 41.3 18.3 years
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2. SHAREHOLDERS' EQUITY (as of March 31, 2007)
(1) TOTAL NUMBER OF SHARES AUTHORIZED TO BE ISSUED: 1,500,000,000
(2) TOTAL NUMBER OF SHARES ISSUED: 744,912,078
(3) NUMBER OF SHAREHOLDERS: 41,364
(4) MAJOR SHAREHOLDERS:
Name The shareholders' stake in the Company
----------------------------------------------------------------------------------------------------------
Thousands of shares Investment ratio (%)
The Master Trust Bank of Japan, Ltd. (Trust Account) 66,141 8.88
Japan Trustee Services Bank, Ltd. (Trust Account) 39,260 5.27
The Bank of Tokyo-Mitsubishi UFJ, Ltd. 36,193 4.86
Nippon Life Insurance Company 31,306 4.20
NIPPONKOA Insurance Co., Ltd. 18,193 2.44
State Street Bank and Trust Company 17,112 2.30
THE NEW TECHNOLOGY DEVELOPMENT FOUNDATION 15,839 2.13
State Street Bank and Trust Company 505103 14,628 1.96
Trust & Custody Services Bank, Ltd. (Trust Account B) 12,219 1.64
National Mutual Insurance Federation of Agricultural Cooperatives 11,947 1.60
Notes:
1. The number of treasury stocks (14,904 thousands of shares) is not included
in the chart above.
2. In addition to the above, stakes in the Company include 1,000 thousands of
shares (0.13%) that NIPPONKOA Insurance Co., Ltd. owns and has entrusted
with The Master Trust Bank of Japan, Ltd. These shares are registered in
the name of The Masters Trust Bank of Japan, Ltd. as the owner, but
NIPPONKOA Insurance Co., Ltd. reserves the right to instruct on exercising
voting rights on these shares.
* Breakdown of shareholders
Category Thousands of shares held Number of shareholders Investment ratio (%)
----------------------------------------------------------------------------------------------------
Financial institutions 332,444 217 44.59
Foreign companies 298,606 698 40.08
Individual investors and others 51,966 39,698 6.96
Other domestic companies 32,347 703 4.34
Treasury stock 14,904 1 2.00
Securities companies 14,642 47 1.96
3. STATUS OF STOCK ACQUISITION RIGHTS
On December 7, 2006, the Company issued "Euro Yen Zero Coupon Convertible Bonds
due 2011(bonds with stock acquisition rights)". This bond is outlined in "1.
Status of the Ricoh Group, (1) Operating conditions for the fiscal year under
review, (iii) Fund procurement."
-13-
4. STATUS OF CORPORATE OFFICERS
(1) DIRECTORS AND CORPORATE AUDITORS (as of March 31, 2007)
Position Name Principal duty, representative status at other companies
----------------------------------------------------------------------------------------------------------------------------
President and Representative Masamitsu Sakurai CEO
Director:
Director: Koichi Endo Management Strategy, Corporate Planning; General Manager of Fact Base
Management Innovation Office
Director: Masayuki Matsumoto Domestic Marketing; General Manager of Corporate Social Responsibility
Division
Director: Katsumi Yoshida Overseas Marketing, Office Business Strategic Planning, Production Printing
Business
Director: Takashi Nakamura Personnel, Production, and Legal Affairs and Intellectual Property
Director: Shiro Kondo Imaging Engine Solutions Development; General Manager of MFP Business
Group
Director: Kazunori Azuma General Manger of Marketing Group
Director: Zenji Miura Finance, Information, IR, Corporate Communication, Management of Group
Companies; General Manager of Corporate Planning Division
Director: Kiyoshi Sakai* Technology, Corporate Environment
Director: Takaaki Wakasugi Co-director of Mitsui Life Financial Research Center, University of Michigan
Ross School of Business Director and General Manager of Japan Corporate
Governance Research Institute, Inc. Professor, Faculty of Business
Administration, Tokyo Keizai University
Director: Takuya Goto* Chairman of the Board, Kao Corporation
Corporate Auditor: Kohji Tomizawa Full-time
Corporate Auditor: Shigekazu Iijima* Full-time
Corporate Auditor: Kenji Matsuishi General Manager of Matsuishi Legal Services
Corporate Auditor: Takehiko Wada President and Representative Director of San-Ai Oil Co., Ltd.
Notes:
1. Directors and Corporate Auditors marked with * were elected at the 106th
Ordinary General Meeting of Shareholders held on June 28, 2006, and assumed
office.
2. Directors Takaaki Wakasugi and Takuya Goto are Outside Directors stipulated
in Article 2-15 of the Corporate Law.
3. Corporate Auditors Kenji Matsuishi and Takehiko Wada are Outside Corporate
Auditors stipulated in Article 2-16 of the Corporate Law.
4. Serving at the Company's accounting and finance sector for many years,
Corporate Auditor Shigekazu Iijima has considerable knowledge about finance and
accounting.
5. As a result of personnel changes made after the end of the fiscal year under
review, Director Shiro Kondo was appointed to Representative Director and Chief
Executive Officer on April 1, 2007, and Representative Director Masamitsu
Sakurai was named Chairman of Japan Association of Corporate Executives on
April 24, 2007.
-14-
(2) TOTAL REMUNERATION, ETC. PAID TO DIRECTORS AND CORPORATE AUDITORS
Amount of remuneration paid
Category Number of recipients (million yen)
-----------------------------------------------------------------------------
Directors 11 994
(Outside Directors) (2) (16)
Corporate Auditors 4 67
(Outside Corporate Auditors) (2) (19)
-----------------------------------------------------------------------------
Total 15 1,062
-----------------------------------------------------------------------------
Notes:
1. The remuneration, etc. paid to Directors excludes employee wages for
Directors who are also employees.
2. The remuneration, etc. paid to Directors include amount of allowance for
Directors' bonuses based on the proposal, "Payment of bonuses to Directors" to
be submitted to the 107th Ordinary General Meeting of Shareholders to be held
on June 27, 2007, amounting to Yen 185 million.
3. The above remuneration, etc. include a total amount of Yen473 million for
Directors (including Yen3 million for two Outside Directors) and Yen 25 million
for Corporate Auditors (including Yen 11 million for two Outside Corporate
Auditors) based on the proposal, "Payment of retirement allowances for
Directors and Corporate Auditors following the abolishment of the retirement
allowance system," which is scheduled to be submitted to the 107th Ordinary
General Meeting of Shareholders to be held on June 27, 2007.
4. In accordance with the proposal, "Granting of retirement allowances to
retiring directors and a corporate auditor," which was approved at the 106th
Ordinary General Meeting of Shareholders held on June 28, 2006, the Company
paid Yen 180 million separately to them.
(3) OUTSIDE DIRECTORS AND CORPORATE AUDITORS
(i) Significant concurrent jobs Outside Directors and Corporate Auditors are
engaged in at other companies
Concurrent positions as Director in charge of
execution of operations or outside Director, at
Position Name other companies
-------------------------------------------------------------------------------------
Outside Director Takaaki Wakasugi Co-director of Mitsui Life Financial Research
Center, University of Michigan Ross School of
Business
Director and General Manager of Japan Corporate
Governance Research Institute, Inc.
Professor, Faculty of Business Administration,
Tokyo Keizai University
Emeritus Professor, the University of Tokyo
Outside Corporate Auditor, JFE Holdings, Inc.
Outside Director Takuya Goto Chairman of the Board, Kao Corporation
Outside Director, Asahi Glass Co., Ltd.
Outside Director, Nagase & Co., Ltd.
Outside Corporate Kenji Matsuishi General Manager of Matsuishi Legal Services
Auditor
Outside Corporate Takehiko Wada President and Representative Director of San-Ai
Auditor Oil Co., Ltd.
.. There is no special conflict of interests between the Company and Kao
Corporation.
.. There is no special conflict of interests between the Company and San-Ai Oil
Co., Ltd.
-15-
(ii) Major activities by outside Directors and Corporate Auditors
Position Name Main activities
-----------------------------------------------------------------------------------------------
Outside Director Takaaki Wakasugi Participated in 11 of the 14 Board of Directors meetings
held during the fiscal year under review, and made
statements, whenever necessary, mainly from his expert
perspective as a scholar of finance and a governance
specialist.
Outside Director Takuya Goto Participated in 8 of 9 Board of Directors meetings held
after taking over as Outside Director, and made statements,
whenever necessary, mainly from the perspective of a
highly-experienced manager.
Outside Corporate Kenji Matsuishi Participated in 12 of the 14 Board of Directors meetings
Auditor and 8 of 9 Board of Corporate Auditors meetings, held
during the fiscal year under review, and made statements,
whenever necessary, mainly from his various perspectives
based on the insight he has cultivated as a lawyer.
Outside Corporate Takehiko Wada Participated in 8 of the 14 Board of Directors meetings and
Auditor all of 9 Board of Corporate Auditors meetings, held during
the fiscal year under review, and made statements, whenever
necessary, mainly from the perspective of a
highly-experienced manager.
(iii) Outline of liability limitation contracts
The Company amended its Articles of Incorporation at the 106th Ordinary General
Meeting of Shareholders on June 28, 2006, establishing the provision of
contracts to limit liabilities of Outside Directors and Corporate Auditors.
The outline of liability limitation contracts, which the Company concluded with
Outside Directors and Corporate Auditors in accordance with the revised
Articles of Incorporation, is as follows.
(a)Liability limitation contracts with Outside Directors
Under such contracts, the maximum liability of Outside Directors shall
be the higher of either of Yen 10.0 million or a minimum liability
amount stipulated in Article 425, Item 1 of the Corporate Law.
(b)Liability limitation contracts with Outside Corporate Auditors
Under such contracts, the maximum liability of Outside Corporate
Auditors shall be the higher of either of Yen 5.0 million or a minimum
liability amount stipulated in Article 425, Item 1 of the Corporate Law.
5. ACCOUNTING AUDITORS
(1) NAME: KPMG AZSA & CO.
(2) REMUNERATION, ETC.:
Amount to be paid
------------------------------------------------------------------------------
Remuneration, etc. to be paid to the accounting auditor by
the Company 179 million yen
Total sum of remuneration, etc. to be paid to the
accounting auditor by the Company and its subsidiaries 344 million yen
-16-
Notes:
1. In the audit contract signed between the Company and the accounting auditor,
there is no classification between remuneration for audit services pursuant to
the Corporate Law and that in accordance with the Securities and Exchange Law.
Accordingly, the above "Remuneration, etc. to be paid to the accounting auditor
by the Company" above represent the sum of these remunerations.
2. The Company consigns to the accounting auditor not only services provided in
Article 2, Paragraph 1 of the Certified Public Accountants Law but also
services for preparing comfort letters at the time of issuing corporate bonds,
as well as due diligence relating to corporate acquisition. Hence, fees for
such services are included in the above remuneration, etc.
3. Among the Company's major subsidiaries, Ricoh Corporation and other 5
subsidiaries are audited by KPMG.
(3) POLICY REGARDING DECISION TO DISMISS OR NOT REAPPOINT THE ACCOUNTING AUDITOR
The Board of Corporate Auditors, by unanimous agreement, will dismiss the
accounting auditor when confirmed that the accounting auditor falls under any
item of Article 340, Paragraph 1 of the Corporate Law. In this case, the
dismissal and its reasons will be reported at the first general meeting of
shareholders to be held after the dismissal.
In addition to the above, the Company will propose at a general meeting of
shareholders to dismiss or not reappoint the accounting auditor when confirmed
that it is difficult for the accounting auditor to properly perform audit
duties with the agreement of the Board of Corporate Auditors or as requested by
the Board of Corporate Auditors.
6. SYSTEMS TO SECURE APPROPRIATENESS OF OPERATIONS
Resolutions adopted by the Board of Directors for systems to secure the
appropriateness of the Company's operations are as follows:
(1) SYSTEM TO ENSURE THE EFFICIENT IMPLEMENTATION OF DIRECTORS' DUTIES AND
COMPLIANCE WITH LAWS AND ARTICLES OF INCORPORATION
The Company promotes a sense of alertness in execution of management and
execution of business, and in addition uses the following management structures
in order to further improve its quality and speediness.
(i) Management transparency and fairness of decision-making are strengthened by
the presence of Outside Directors.
(ii) As part of the strengthening of management oversight functions by the
Board of Directors, the "Nomination and Compensation Committee," a permanent
organization composed of Outside Directors and designated internal Directors,
makes propositions and resolutions concerning the regulation of the nomination,
dismissal and compensation of Directors and executive officers, etc.
(iii) The executive officer system, its division of duties clarified, is
speeding up the decision-making process through the attribution of authority to
each business division.
-17-
(iv) The "Group Management Committee" (GMC) is a decision-making organization
delegated by the Board of Directors, and composed of executive officers who
meet certain qualifications. The GMC operates so as to accelerate deliberation
and decision-making from the perspective of the optimum management of the
entire Group, concerning proposals on the most appropriate strategies for
direction of each business division and the entire Group, within the limits
granted to it.
(v) The "Disclosure Committee" is an independent organization that assures the
accuracy, timeliness and comprehensiveness of disclosure of corporate
information, and it performs checks on the process for the production of
disclosed information.
(2) SYSTEMS RELATED TO THE RETENTION AND MANAGEMENT OF INFORMATION RELATED TO
THE IMPLEMENTATION OF DIRECTORS' DUTIES
Records and proposals related to decisions by Directors in the course of their
duties are collated, retained and managed in compliance with applicable laws,
regulations and internal rules. Documents are kept so that they can be
retrieved and produced in response to a request from Directors and Corporate
Auditors.
(3) REGULATIONS AND OTHER STRUCTURES REGARDING RISK MANAGEMENT FOR LOSSES
(i) The occurrence of losses shall be proactively prevented based on
regulations for risk management.
(ii) Should losses nevertheless arise, efforts shall be made to minimize damage
(loss) based on standards for initial reaction.
(iii) In order to manage losses as a Group, comprehensively and in a unified
fashion, a division responsible for integrated management will be created that
will thoroughly cover all aspects globally.
(4) SYSTEMS TO ENSURE APPROPRIATE COMPLIANCE WITH LAWS, AND ARTICLES OF
INCORPORATION CONCERNING THE PERFORMANCE OF EMPLOYEE'S DUTIES
(i) In order to thoroughly implement the "Ricoh Group Corporate Social
Responsibility (CSR) Charter" which sets forth the principles of corporate
behavior with regard to CSR including compliance, and the "Ricoh Group Code of
Conduct" which shows the general rules of conduct for Ricoh Group employees,
the Specialty Committee and a "Hot Line" for reporting incidents and seeking
advice have been established. Also various training programs are set up with an
aim to enhance compliance domestically and overseas.
(ii) Efforts are being made to improve business processes and construct a
framework for standardized internal control throughout the entire Ricoh Group,
with the goal of "complying with laws, norms and internal rules," "improvement
of business effectiveness and efficiency," "maintaining high reliability of
financial reporting" and "securing of assets," including compliance to the
Sarbanes-Oxley Act of 2002, the Financial Products
-18-
Exchange Law and other relevant laws and regulations.
(iii) To ensure appropriate internal auditing, an internal auditing department
shall perform fair and objective examination and evaluation of how each
division is executing its business based on legal compliance and rational
criteria, and provide advice or recommendation for improvement.
(iv) The Company shall establish a department specializing in enhancing and
promoting the functions of (i), (ii) and (iii) above on an integrated basis. In
an aim to establish and improve an internal control system of the Ricoh Group,
the Company shall institute an "Internal Control Committee" within the Group
Management Committee, which is expected to be held regularly to deliberate and
decide on relevant matters.
(5) SYSTEMS TO ENSURE CORRECT BUSINESS STANDARDS IN THE RICOH GROUP COMPOSED OF
THE COMPANY AND ITS AFFILIATES
Ricoh and each affiliate in the Ricoh Group shall devise a system that will
ensure the adherence to correct business standards to improve business
performance and enhance the prosperity of each Group company, while keeping
mutual respect for their independence, as follows:
(i) The Company's Board of Directors and the "Group Management Committee" (GMC)
make decisions and perform management oversight for the Ricoh Group as a whole.
To ensure the efficacy of such efforts, they establish management regulations
concerning affiliate companies, and set up relevant administrative
organizations in order to manage the Group.
(ii) The "Ricoh Group Standard" (RGS) represents a set of common rules to be
followed by the entire Group.
(6) MATTERS REGARDING EMPLOYEES WHOM AUDITORS REQUEST TO ASSIST THEM IN THE
PERFORMANCE OF THEIR DUTIES
In order to clarify the independency of staff for Corporate Auditors, the
Company shall establish a Corporate Auditor office, where exclusively assigned
employees assist Corporate Auditors in auditing through directives from
Corporate Auditors.
(7) MATTERS RELATED TO THE INDEPENDENCE OF CORPORATE AUDITORS' STAFF FROM
DIRECTORS DESCRIBED IN (6) ABOVE
When an employee (as in (6) above) assists CORPORATE Auditors in their work, he
or she shall not be subject to orders given by Directors. In addition,
decisions concerning personnel assessments or personnel changes regarding said
employees shall be made only after hearing the opinions of the CORPORATE
Auditors.
(8) SYSTEMS TO ENABLE DIRECTORS OR EMPLOYEES TO REPORT TO CORPORATE AUDITORS,
AND OTHER SYSTEMS RELATED TO REPORTING TO AUDITORS
-19-
Directors or employees shall report to CORPORATE Auditors matters concerning
laws and regulations, as well as "important matters decided by Directors which
affect the entire company," "the results of internal audits," "the status of
reporting via the internal reporting system," and "matters which auditors have
sought reports about."
(9) SYSTEMS ESTABLISHED TO ENSURE THE EFFICACIOUS PERFORMANCE OF AUDITING
RESPONSIBILITIES BY CORPORATE AUDITORS
CORPORATE Auditors shall perform audits thoroughly by attending the board of
Directors meetings and management meetings, receiving reports on exercise of
function from the Directors and executive officers, reviewing important
resolution documents, and investigating the status of operations of divisions
and group companies.
-20-
CONSOLIDATED BALANCE SHEETS (as of March 31, 2007)
Millions of yen
------------------------------------------------------------------------------
As of March 31,
------------------------------------------------------------------------------
2007 2006
------------------------------------------------------------------------------
ASSETS
Current Assets:
Cash and cash equivalents 255,737 187,055
Time deposits 1,417 1,470
Marketable securities 177 162
Trade receivables:
Notes 66,474 75,678
Accounts 450,231 391,972
Less-Allowance for doubtful receivables (16,555) (16,031)
Total trade receivables 500,150 451,619
Current maturities of long-term finance receivables, net 193,087 178,882
Inventories:
Finished goods 113,379 104,218
Work in process and raw materials 70,975 65,027
Total inventories 184,354 169,245
Deferred income taxes and other 65,170 55,110
Total Current Assets 1,200,092 1,043,543
Fixed Assets:
Property, Plant and Equipment:
Land 47,007 46,721
Buildings and structures 227,900 217,302
Machinery and equipment 636,577 622,038
Construction in progress 12,512 11,541
Less-Accumulated depreciation (659,328) (629,359)
Total property, plant and equipment 264,668 268,243
Investment and Other Assets:
Long-term finance receivables, net 435,874 415,435
Investment securities 74,836 36,419
Investment in and advances to affiliates 15,608 52,028
Goodwill 72,048 51,934
Other intangible assets 81,925 79,175
Lease deposits and other 98,355 94,406
Total investment and other assets 778,646 729,397
Total Fixed Assets: 1,043,314 997,640
------------------------------------------------------------------------------
Total Assets 2,243,406 2,041,183
==============================================================================
-21-
CONSOLIDATED BALANCE SHEETS (as of March 31, 2007)
Millions of yen
-------------------------------------------------------------------------------
As of March 31,
-------------------------------------------------------------------------------
2007 2006
-------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings 91,673 82,520
Current maturities of long-term
indebtedness 87,174 103,131
Trade payables-
Notes 25,000 25,591
Accounts 342,211 313,561
Total trade payables 367,211 339,152
Accrued income taxes 46,194 40,936
Accrued expenses and other 143,360 118,289
Total Current Liabilities 735,612 684,028
Long-term Liabilities:
Long-term indebtedness 236,801 195,626
Accrued pension and severance costs 99,028 97,020
Deferred income taxes 44,183 51,374
Total Long-term Liabilities: 380,012 344,020
Total Liabilities 1,115,624 1,028,048
Minority Interests 56,869 52,890
Shareholders' Investment
Common stock 135,364 135,364
Additional paid-in capital 186,454 186,450
Retained earnings 752,398 665,394
Accumulated other comprehensive income
(loss) 26,998 4,099
Treasury stock at cost (30,301) (31,062)
Total shareholders' investment 1,070,913 960,245
-------------------------------------------------------------------------------
Total Liabilities, Minority
Interests and Shareholders'
Investment 2,243,406 2,041,183
==============================================================================
-22-
CONSOLIDATED STATEMENTS OF INCOME (for the year ended March 31, 2007)
Millions of yen
---------------------------------------------------------------------------
For the year ended
March 31,
---------------------------------------------------------------------------
2007 2006
---------------------------------------------------------------------------
Net sales 2,068,925 1,909,238
Cost of sales 1,206,519 1,114,238
Gross profit 862,406 795,000
Selling, general and administrative expenses 688,026 646,416
Operating income 174,380 148,584
Other (Income) Expenses (139) (4,182)
Interest and dividend income (5,501) (2,896)
Interest expenses 7,350 5,244
Foreign exchange gain and loss, net 1,199 (3,748)
Others, net (3,187) (2,782)
Income from continuing operations before Income Taxes 174,519 152,766
Provision for Income Taxes:
Current 66,523 60,857
Deferred (2,197) (4,692)
Total income taxes 64,326 56,165
Minority interests (5,508) (4,185)
Equity in Earnings of Affiliates 1,539 2,606
---------------------------------------------------------------------------
Income from continuing operations 106,224 95,022
Income from discontinued operations, net of tax 5,500 2,035
Net income 111,724 97,057
==============================================================================
Note:As a result of the sale of a business, the operating results from the
discontinued operations have been reclassified in accordance with
Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets."
-23-
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
(for the year ended March 31, 2007)
(Unit: millions of yen)
-----------------------------------------------------------------------------------------------------------------------------
Accumulated
Additional other Total
Common paid-in Retained comprehensive Treasury Shareholders'
stock capital earnings income (loss) stock Investment
-----------------------------------------------------------------------------------------------------------------------------
Beginning balance 135,364 186,450 665,394 4,099 (31,062) 960,245
-----------------------------------------------------------------------------------------------------------------------------
Cumulative effect of adjustments resulting from
the adoption of SAB No. 108, net of tax (Note 1) -- -- (6,464) -- -- (6,464)
-----------------------------------------------------------------------------------------------------------------------------
Beginning balance (after adjustment) 135,364 186,450 658,930 4,099 (31,062) 953,781
-----------------------------------------------------------------------------------------------------------------------------
Gains (Loss) on disposal of treasury stock 4 4
-----------------------------------------------------------------------------------------------------------------------------
Dividends declared and approved (18,256) (18,256)
-----------------------------------------------------------------------------------------------------------------------------
Comprehensive income (loss)
-----------------------------------------------------------------------------------------------------------------------------
Net income 111,724 111,724
-----------------------------------------------------------------------------------------------------------------------------
Net unrealized holding gains on
available-for-sale securities 73 73
-----------------------------------------------------------------------------------------------------------------------------
Minimum pension liability adjustments 970 970
-----------------------------------------------------------------------------------------------------------------------------
Unrealized gains (losses) on derivatives (185) (185)
-----------------------------------------------------------------------------------------------------------------------------
Cumulative translation adjustments 24,774 24,774
-----------------------------------------------------------------------------------------------------------------------------
Total comprehensive income (loss) 137,356
Adjustment to initially apply SFAS No. 158, net
of tax (Note 2) (2,733) (2,733)
-----------------------------------------------------------------------------------------------------------------------------
Purchase of treasury stocks, net 761 761
-----------------------------------------------------------------------------------------------------------------------------
Ending balance 135,364 186,454 752,398 26,998 (30,301) 1,070,913
-----------------------------------------------------------------------------------------------------------------------------
Notes:
1. SAB (Staff Accounting Bulletin) No. 108: "Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements"
2. SFAS (Statement of Financial Accounting Standards) No. 158: "Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans" issued
by the Financial Accounting Standards Board (FASB) of the U.S.
-24-
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accounting Policies Regarding the Preparation of
Consolidated Financial Statements
SCOPE OF CONSOLIDATION
1. ITEMS RELATED TO SCOPE OF CONSOLIDATION
(1) NUMBER OF CONSOLIDATED SUBSIDIARIES: 272 COMPANIES
The name of major consolidated subsidiaries can be found in 1. Status of the
Ricoh Group, (3) Status of major subsidiaries.
(2) CHANGES IN SCOPE OF CONSOLIDATION
In the fiscal year under review, the Company added 28 companies in scope of
consolidation, and excluded 15 companies from scope of consolidation.
2. APPLICATION OF THE EQUITY METHOD
(1) NUMBER OF COMPANIES TO WHICH THE EQUITY METHOD IS APPLIED: 50
Name of major companies to which the equity method is applied: Sindo Ricoh Co.,
Ltd., others
(2) CHANGES OF APPLICATION OF EQUITY METHOD
In the fiscal year under review, the Company added 1 company for application of
equity method, and excluded 10 companies from application of equity method.
Coca-Cola West Holdings Co., Ltd. are among companies which were excluded from
application of equity method.
SIGNIFICANT ACCOUNTING POLICIES
1. BASIS FOR PREPARING CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements including consolidated balance sheets and
consolidated statements of income has been prepared on the basis of accounting
principles generally accepted in the United States of America ("U.S. GAAP"), in
compliance with Article 148, Section 1 of the Corporate Calculation
Regulations. However, in compliance with the article, certain disclosure that
is required on the basis of U.S. GAAP is omitted.
2. ACCOUNTING POLICY FOR SECURITIES
The Company and Consolidated Subsidiaries ("Ricoh") applies Statement of
Financial Accounting Standards ("SFAS") No.115, "Accounting for Certain
Investments in Debt and Equity Securities". All of Ricoh's Securities in debt
and marketable equity securities are mainly classified as available-for-sale
securities.
Those available-for-sale securities are reported at fair value with unrealized
gains and
-25-
losses, net of related taxes, excluded from earnings and reported in
accumulated other comprehensive income (loss).
3. ACCOUNTING POLICY FOR INVENTORIES:
Inventories are mainly stated principally at the lower of average cost or net
realizable values.
4. PROPERTY, PLANT AND EQUIPMENT:
For the Company and its domestic subsidiaries, depreciation of property, plant
and equipment is computed principally by using the declining-balance method
over the estimated useful lives. Most of the foreign subsidiaries have adopted
the straight-line method for computing depreciation. Certain leased buildings,
machinery and equipment are accounted for as capital leases in conformity with
SFAS No. 13 "Accounting for Leases." which is classified as a capital lease, is
treated as acquisition of tangible fixed assets.
5. SOFTWARE FOR INTERNAL USE:
Costs incurred for computer software developed or obtained for internal use are
capitalized and amortized on a straight line basis over their estimated useful
lives in accordance with Statement of Position (SOP) 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use."
6. GOODWILL AND OTHER INTANGIBLE FIXED ASSETS:
Goodwill and intangible assets that have indefinite useful lives are not
amortized but tested at least annually for impairment, in accordance with the
SFAS No. 142, "Goodwill and Other Intangible Assets." Other intangible fixed
assets that have definite useful lives are depreciated by using the
straight-line method.
7. BASIS FOR PROVISION OF RESERVES
(1) ALLOWANCE FOR DOUBTFUL RECEIVABLES:
Ricoh records allowances for doubtful receivables that are based upon
historical experience and specific customer collection issues. The estimated
amount of probable credit losses in its existing receivables is determined from
write-off history adjusted to reflect current economic conditions and specific
allowances for receivables including nonperforming leases, impaired loans or
other accounts for which Ricoh has concluded it will be unable to collect all
amounts due according to original terms of the lease or loan agreement.
(2) RESERVE FOR RETIREMENT ALLOWANCES:
The measurement of pension costs and liabilities is determined in accordance
with SFAS No. 87, "Employers' Accounting for Pensions" and SFAS No. 158,
"Employers' Accounting for Defined Benefit Pension and Other Postretirement
Plans." Changes in the amount of either the projected benefit obligation or
plan assets resulting from actual results different from that assumed and from
changes in assumptions can result in gains and losses in the consolidated
financial statements. Amortization of net gain or loss is included as a
component of the net
-26-
periodic benefit plan cost for a year if, as of the beginning of the year, that
net gain or loss exceeds 10 percent of the greater of (1) the projected benefit
obligation or (2) the fair value of that plan's assets. In such case, the
amount of amortization recognized is the resulting excess divided by the
average remaining service period of active employees expected to receive
benefits under the plan.
8. The consumption tax and the local consumption tax are excluded from profits
and losses.
9. On May 31, 2006, the Company's subsidiary San-Ai Co., Ltd. sold its digital
content distribution business to Giga Networks Co., Ltd. (former Mobile
Alliance Co., Ltd.). As a result of the sales, these operations of the
business units sold were reclassified to discontinued operations pursuant
to the requirement on SFAS No. 144 "Accounting Standard for Impairment or
Disposal of Long-term Assets" because the company and the subsidiary have
no significant continuing involvement in the operating sold.
(Change in significant accounting policies)
1. In measuring costs and liabilities relating to lump-sum retirement
allowances, the Company adopted SFAS No. 158, "Employers' Accounting of
Defined Benefit Pension and Other Postretirement Benefit Plans" on
March 31, 2007. Accordingly, the Company recognizes the funded status of
the pension plan (difference between retirement obligations and fair value
of pension assets) on its consolidated balance sheets, and corresponding,
unrecognized actuarial net losses, pension fund reserves shortfall and
transition obligations or assets are reported in accumulated other
comprehensive income (loss).
2. The Securities and Exchange Commission of the U.S. issued SAB (Staff
Accounting Bulletin) No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements" in September 2006. SAB No. 108 requires companies to quantify
misstatements using both the balance sheet approach and the income
statement approach, and to evaluate the importance of misstatements taking
into account relevant quantitative and qualitative factors. If, in the
initial year of adopting SAB No. 108, it is concluded that the effect of
prior year misstatements is material, companies are allowed, as a
transitional measure, to record the effect as a cumulative effect
adjustment to beginning of year retained earnings.
The Company and some of its domestic consolidated subsidiaries
previously set the residual value of tangible fixed assets at 5% of
acquisition cost in principle using the standards provided in the Corporate
Tax Law. However, we concluded that it is adequate to set the residual
value at Yen 1, given a negligible disposal value of tangible fixed assets
at the termination of useful life.
Accordingly, we reduced the beginning of year balance of retained
earnings for fiscal year under review by Yen 6,464 million.
NOTES TO CONSOLIDATED BALANCE SHEETS
1. Allowance for doubtful receivables related to long-term finance receivables:
Yen 13,779 million
-27-
2. Accumulated comprehensive other income (loss) includes accumulated foreign
currency translation adjustments, unrealized gain (loss) on securities,
unrealized gain (loss) on derivatives, and pension liability adjustments.
3. Pledged assets and liabilities:
(1) Pledged assets:
Tangible fixed assets: Yen 2,782 million
Leasing receivables: Yen 404 million
(2) Pledged liabilities Yen 597 million
4. Guarantee obligation including employees' housing loans: Yen 1,092 million
NOTES TO CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' INVESTMENT
1. Details and total number of shares outstanding as of the end of the fiscal
year
Common stock: 744,912,078 shares
2. Dividend, effective date of which belongs to the next fiscal year though
base date belongs to the current fiscal year
The Company intends to propose an agenda on dividends (dividend per share:
Yen 15.00; total amount of dividend: Yen 10,950 million; base date:
March 31, 2007) for the 107th Ordinary General Meeting of Shareholders to
be held on June 27, 2007.
3. Details and number of shares to be object of stock acquisition rights at
the end of the current fiscal year
In case "Euro Yen Zero Coupon Convertible Bonds due 2011 (bonds with stock
acquisition rights)" issued on December 7, 2006 is converted at the price
of Yen 2,800:
Common stock: 19,741,071 shares
NOTES TO PER-SHARE INFORMATION
1. Net assets per share: Yen 1,467.03
2. Basic net income per share: Yen 153.10
Diluted net income per share: Yen 151.89
ADDITIONAL INFORMATION
On January 25, 2007, the Company and IBM Corporation concluded an agreement to
establish InfoPrint Solutions Company as a joint venture based on IBM's
printing system business division. The amount the Company paid to IBM based on
the agreement was 725 million U.S. dollars (payment date: June 1, 2007).
-28-
[English Translation of the Auditors' Report Originally Issued in the Japanese
Language]
INDEPENDENT AUDITORS' REPORT
-----------------------------
May 15, 2007
The Board of Directors
Ricoh Company, Ltd.
KPMG AZSA & Co.
Teruo Suzuki (Seal)
Designated and Engagement Partner
Certified Public Accountant
Ryoji Fujii (Seal)
Designated and Engagement Partner
Certified Public Accountant
Mikihiro Himeno (Seal)
Designated and Engagement Partner
Certified Public Accountant
We have audited the consolidated statutory report, that is the consolidated
balance sheet, the consolidated statement of income, the consolidated statement
of shareholders' investment and the notes to consolidated financial statement
of Ricoh Company, Ltd. for the year from April 1, 2006 to March 31, 2007 in
accordance with Article 444(4) of the Corporate Law. The consolidated statutory
report is the responsibility of the Company's management. Our responsibility is
to express an opinion on the consolidated statutory report based on our audit
as independent auditors.
We conducted our audit in accordance with auditing standards generally accepted
in Japan. Those auditing standards require that we obtain reasonable assurance
about whether the consolidated statutory report is free of material
misstatement. An audit is performed on a test basis, and includes assessing the
accounting principles used, the method of their application and estimates made
by management, as well as evaluating the overall presentation of the
consolidated statutory report. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the consolidated statutory report referred to above presents
fairly, in all material respects, the consolidated financial position of Ricoh
Company, Ltd. and consolidated subsidiaries as of March 31, 2007 and the
consolidated results of their operations for the year then ended, in conformity
with the Article 148(1) of the regulation on the Corporate Law and the
recognition and measurement criteria of accounting principles generally
accepted in the United States of America (Refer to Note 1, Significant
Accounting Policies, Accounting Policies Regarding the Preparation of
Consolidated Financial Statements, Notes to Consolidated Financial Statements).
As discussed in Accounting Policies Regarding the Preparation of Consolidated
Financial Statements, the Company adopted Securities and Exchange Commission
Staff Accounting Bulletin No.108 "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements."
Our firm and engagement partners have no interest in the Company which should
be disclosed pursuant to the provisions of the Certified Public Accountants Law
of Japan.
Note: The details of audit report on consolidated financial statements by the
Board of Auditors are included in Transcript of Corporate Auditor's
Report on Consolidated Financial Statements (page 40).
-29-
NON-CONSOLIDATED BALANCE SHEETS (as of March 31, 2007)
Millions of yen
-------------------------------------------------------------------------------
As of March 31,
-------------------------------------------------------------------------------
2007 2006
-------------------------------------------------------------------------------
ASSETS
Current Assets:
Cash on hand and in banks 23,602 8,689
Notes receivable - trade 7,221 7,540
Accounts receivable - trade 244,754 235,393
Marketable securities 118,046 50,985
Finished goods 24,026 26,352
Raw materials 3,146 3,405
Work in process 7,578 6,806
Supplies 7,248 7,820
Deferred tax assets 16,206 12,703
Accounts receivable - other 16,678 14,510
Short-term loans receivable 74,131 102,411
Other current assets 5,960 6,019
Allowance for doubtful accounts (239) (1,582)
Total Current Assets 548,362 481,056
Fixed Assets:
Tangible fixed assets:
Buildings 50,073 48,532
Structures 2,600 1,894
Machinery and equipment 24,721 19,391
Vehicles 13 19
Tools 20,689 21,997
Land 29,274 29,261
Construction in progress 5,085 9,277
Total tangible fixed assets 132,457 130,374
Intangible fixed assets:
Leasehold right and others 11,279 9,169
Software 20,484 22,190
Total Intangible fixed assets 31,764 31,359
Investments and Other Assets:
Investment securities 26,995 33,217
Affiliates' securities 189,463 191,797
Investment in affiliates 27,488 25,974
Long-term loans receivable 106,858 80,814
Deferred tax assets 1,788 1,620
Lease deposit 6,811 7,009
Other investments 4,799 2,289
Allowance for doubtful accounts (501) (2,962)
Total investments and other assets 363,705 339,761
Total Fixed Assets 527,927 501,494
-------------------------------------------------------------------------------
Total Assets 1,076,290 982,551
==============================================================================
-30-
NON-CONSOLIDATED BALANCE SHEETS (as of March 31, 2007)
Millions of yen
-------------------------------------------------------------------------------
As of March 31,
-------------------------------------------------------------------------------
2007 2006
-------------------------------------------------------------------------------
LIABILITIES
Current Liabilities:
Notes payable - trade 5,017 4,641
Accounts payable - trade 146,776 133,036
Bonds maturing within one year -- 35,000
Accounts payable - other 17,331 17,112
Accrued expenses 35,954 33,153
Accrued corporate tax, etc. 24,939 21,308
Reserve for bonuses 14,154 11,872
Reserve for Directors' bonuses 185 --
Warranty reserve 612 418
Other current liabilities 5,163 5,329
Total Current Liabilities 250,134 261,871
Long-term Liabilities:
Bonds 25,000 25,000
Convertible Bonds 55,256 --
Reserve for benefit obligation 616 417
Reserve for Directors' retirement allowances 466 510
Total Long-term Liabilities 81,339 25,927
Total Liabilities 331,474 287,799
(Net Assets)
Shareholders' Equity:
Common Stock 135,364 135,364
Additional paid-in-capital:
Legal capital reserve 180,804 180,804
Other additional paid-in-capital 3 --
Total additional paid-in-capital 180,808 180,804
Retained Earnings:
Legal reserve 14,955 14,955
Other retained earnings 437,714 384,198
Reserve for deferral of capital gain on
property 506 550
Reserve for special depreciation 1,147 1,272
Reserve for warranty on computer programs 124 167
Reserve for social contributions 104 117
General reserve 362,350 326,350
Retained earnings brought forward 73,482 55,740
Total Retained Earnings 452,669 399,153
Treasury stock (30,114) (29,339)
Total Shareholders' Equity 738,727 685,982
Difference of appreciation and conversion
Difference of appreciation and conversion 6,088 8,769
Net unrealized holding gains on securities 6,088 8,769
Total Net Assets (Shareholders' Equity) 744,815 694,752
-------------------------------------------------------------------------------
Total Liabilities and Net Assets
(Shareholders' Equity) 1,076,290 982,551
==============================================================================
-31-
NON-CONSOLIDATED STATEMENTS OF INCOME (for the year ended March 31, 2007)
Millions of yen
-------------------------------------------------------------------------------
For the year ended
March 31,
-------------------------------------------------------------------------------
2007 2006
-------------------------------------------------------------------------------
Net sales 1,033,302 934,354
Cost of sales 712,757 645,496
Gross profit on sales 320,545 288,857
Selling, general and administrative expenses 233,571 219,144
Total operating income 86,974 69,712
Non-operating income:
Interest and dividend income 20,173 7,995
Other revenue 4,534 7,732
Total non-operating revenue 24,707 15,728
Non-operating expenses:
Interest expenses 636 709
Other expenses 5,813 2,290
Total non-operating expenses 6,450 3,000
Ordinary income 105,231 82,441
Extraordinary income:
Reversal of allowance for doubtful accounts 3,632 --
Gains on sales of fixed assets -- 1,662
Total extraordinary income 3,632 1,662
Net income before taxes 108,864 84,103
Corporate, inhabitant and enterprise taxes 38,800 27,400
Corporate and other tax adjustments (1,844) 1,616
Net income 71,908 55,087
===============================================================================
-32-
STATEMENTS OF CHANGES IN NET ASSETS
(for the year ended March 31, 2007)
(Unit: millions of yen)
---------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity
---------------------------------------------------------------------------------------------------------------------------------
Difference
of
appreciation
and
Additional paid-in-capital Retained earnings conversion
---------------------------------------------------------------------------------------------------------------------------------
Net
Other Total unrealized
Legal Other retained share- holding
Common capital additional Legal earnings Treasury holders' gains on Total
stock reserve paid-in-capital reserve (Note 1) stock equity securities net assets
---------------------------------------------------------------------------------------------------------------------------------
Balance as of March 31, 2006 135,364 180,804 -- 14,955 384,198 (29,339) 685,982 8,769 694,752
Changes during the fiscal year
Dividends of retained earnings
(Note 2) (8,763) (8,763) (8,763)
Dividends of retained earnings (9,492) (9,492) (9,492)
Bonuses to Directors (Note 2) (135) (135) (135)
Net income 71,908 71,908 71,908
Acquisition of treasury stock (798) (798) (798)
Disposal of treasury stock 3 23 27 27
Net changes except for
shareholders' equity (2,681) (2,681)
Net changes during the fiscal year -- -- 3 -- 53,516 (775) 52,744 (2,681) 50,063
Balance as of March 31, 2007 135,364 180,804 3 14,955 437,714 (30,114) 738,727 6,088 744,815
---------------------------------------------------------------------------------------------------------------------------------
Note 1: Breakdown of other retained earnings (Unit: millions of yen)
---------------------------------------------------------------------------------------------------------------------------------
Retained
Fixed earnings
assets Reserve for Reserve Reserve for to be
reduction special for social General carried
reserve depreciation programs contributions reserve forward Total
---------------------------------------------------------------------------------------------------------------------------------
Balance as of March 31, 2006 550 1,272 167 117 326,350 55,740 384,198
Changes during the fiscal year
Dividends of retained earnings (Note 2) (8,763) (8,763)
Dividends of retained earnings (9,492) (9,492)
Reversal of fixed assets reduction reserve (Note 2) (22) 22 --
Reversal of fixed assets reduction reserve (21) 21 --
Accumulation of reserve for special depreciation (Note 2) 736 (736) --
Reversal of reserve for special depreciation (Note 2) (393) 393 --
Accumulation of reserve for special depreciation 52 (52) --
Reversal of reserve for special depreciation (521) 521 --
Reversal of reserve for programs (Note 2) (28) 28 --
Reversal of reserve for programs (14) 14 --
Accumulation of reserve for community contribution
(Note 2) 83 (83) --
Reversal of reserve for community contribution (95) 95 --
Accumulation of general reserve (Note 2) 36,000 (36,000) --
Bonuses to Directors (Note 2) (135) (135)
Net income 71,908 71,908
Net changes during the fiscal year (44) (125) (43) (12) 36,000 17,741 53,516
Balance as of March 31, 2007 506 1,147 124 104 362,350 73,482 437,714
---------------------------------------------------------------------------------------------------------------------------------
Note 2: An item of appropriation of retained earnings approved at the Ordinary
General Meeting of Shareholders held in June 2006.
-33-
NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
NOTES REGARDING SIGNIFICANT ACCOUNTING POLICIES
1. ACCOUNTING POLICY FOR SECURITIES
(1) SECURITIES OF SUBSIDIARIES AND AFFILIATES
Securities of subsidiaries and affiliates are stated at cost based on the
moving average method.
(2) OTHER SECURITIES
Marketable securities: Marked to market based on the market price at the
end of the term and other factors (accounting for
all valuation differences with the full net-assets
injection method; the cost of securities sold is
valued at moving average cost).
Non-marketable securities: Stated at cost based on the moving average method.
2. ACCOUNTING POLICY FOR DERIVATIVES
Derivatives are stated at market value.
3. ACCOUNTING POLICY FOR INVENTORIES
Inventories are stated principally at the lower of cost or market using the
gross average method.
4. DEPRECIATION AND AMORTIZATION
(1) TANGIBLE FIXED ASSETS:
Depreciated by using the declining-balance method.
Buildings (excluding fixtures) acquired after April 1, 1998 are depreciated
using the straight-line method. Major useful life is as follows:
Buildings: 5-50 years
Machinery and equipment: 2-12 years
(2) INTANGIBLE FIXED ASSETS:
Depreciated by using the straight-line method.
With software for sale in the market, however, the Company records the
larger of an amortization based on projected sales profits or a uniform
amortization based on a projected effective sales period for the balance. The
initially projected effective sales term is three years. With software for
internal use, the Company uses the straight-line method based on a usable
period of five years.
5. BASIS FOR PROVISION OF RESERVES
(1) ALLOWANCE FOR DOUBTFUL ACCOUNTS:
-34-
The allowance for doubtful accounts is provided to cover possible losses from
bad debts and represents possible individual doubtful accounts based on
historical default rates and the potential for irrecoverableness.
(2) RESERVE FOR BONUSES:
The reserve for accrued bonuses is provided by estimating the amount of bonuses
payable to employees for the current financial year under our corporate rules
for calculating such bonus payment.
(3) RESERVE FOR BONUSES TO DIRECTORS
The reserve for accrued bonuses is provided by estimating the amount of bonuses
payable to Directors for the current of financial year.
(4) WARRANTY RESERVE:
To cover product after-sales service expenses, the Company calculates the
product warranty reserve based on projected service costs.
(5) RESERVE FOR RETIREMENT ALLOWANCES:
To cover projected employee benefits, the Company records the estimated
obligations at the end of current fiscal year based on projected year-end
benefit obligations and plan assets. The company uses straight-line
depreciation for actuarial gains or losses and for prior service costs over
averaged remaining employment term. (15 years)
(6) RESERVE FOR DIRECTORS' RETIREMENT BONUSES:
At year-end, Ricoh calculates the amounts required under internal rules to pay
directors retirement allowances.
6. CONSUMPTION TAXES
The consumption tax and the local consumption tax are excluded from profits and
losses.
7. LEASING
Finance leases for which ownership does not transfer to lessees are accounted
for as operating leases.
8. HEDGE ACCOUNTING
(1) HEDGE ACCOUNTING METHODS:
With currency swaps, the Company hedges by assigning transactions that meet
assignment requirements.
(2) HEDGE INSTRUMENTS AND TARGETS:
There is no Hedging Instrument or Hedging Target at the end of current fiscal
year.
(3) HEDGING POLICIES:
-35-
In keeping with its internal Market Risk Management Rules, Ricoh uses
derivatives to manage the exposure of its assets and liabilities to market
fluctuations.
(4) HEDGE EFFECTIVENESS:
The Company assesses the effectiveness of hedges by analyzing the ratios of the
total market fluctuations of hedged targets and instruments.
REVISION ON ACCOUNTING SETTLEMENT
(1) ACCOUNTING STANDARDS FOR BONUSES TO DIRECTORS
Effective April 1, 2006, Ricoh adopted ASBJ statement No.4 "Accounting Standard
for Directors' Bonuses" issued by the Accounting Standards Board of Japan on
November 29, 2005. The effect of change was to decrease operating income,
ordinary profit and interim net income before income taxes by Yen 185 million,
respectively, for the year ended March 31, 2007 compared with what would have
been recorded under the previous method.
(2) ACCOUNTING STANDARDS FOR PRESENTATION OF THE NET ASSETS SECTION OF BALANCE
SHEETS
Effective April 1, 2006, Ricoh adopted ASBJ Statement No.5 "Accounting
Standards for Presentation of Net Assets in Balance Sheet" and its
Implementation Guidance - ASBJ Guidance No.8, "Guidance on Accounting Standards
for Presentation of Net Assets in Balance Sheet" issued by the Accounting
Standards Board of Japan on December 9, 2005. Amount corresponding to
conventional "Total Shareholders' Equity" in the balance sheet is Yen 744,815
million.
"Net Assets" in the balance sheet for the interim accounting period is
presented according to the revision of "Regulations Concerning the Terminology,
Forms and Preparation Methods of Interim Financial Statement".
NOTES TO NON-CONSOLIDATED BALANCE SHEETS
1. Accumulated depreciation on tangible fixed assets: Yen 363,469 million
2. Guarantee obligation:
Bank borrowings for employees' housing funds: Yen 85 million
3. Monetary debts and credits for affiliates:
Short-term receivable due from affiliates: Yen 295,429 million
Long-term receivable due from affiliates: Yen 107,218 million
Short-term payable due to affiliates: Yen 87,189 million
4. Notes matured at the end of the current fiscal year are settled on the
notes exchange date. Since the final date of the current fiscal year falls
on banking holiday, the following notes matured in the current fiscal year
are included in the balance:
Notes receivable: Yen 1,036 million
Notes payable: Yen 239 million
-36-
NOTES TO NON-CONSOLIDATED STATEMENTS OF INCOME
Transaction with affiliates:
Sales: Yen 921,584 million
Purchase: Yen 385,736 million
Non-operating transactions: Yen 28,836 million
NOTES TO STATEMENTS OF CHANGES IN NET ASSETS
1. Number of outstanding shares as of the end of the fiscal year under review
Common stock: 744,912,078 shares
2. Number of treasury shares as of the end of the fiscal year under review
Common stock: 14,904,395 shares
3. Dividends of retained earnings
(1)Payment of dividends
-------------------------------------------------------------------------------
Total amount of Dividends
Resolution dividends per share Record date
-------------------------------------------------------------------------------
Ordinary General Meeting of Yen 8,763 million Yen 12.00 March 31, 2006
Shareholders (June 28, 2006)
Board of Directors meeting Yen 9,492 million Yen 13.00 September 30, 2006
(October 27, 2006)
-------------------------------------------------------------------------------
(2) Among the dividends for which the record date falls within the fiscal year
under review, the portion of the dividends for which the effective date falls
in the next fiscal year
-------------------------------------------------------------------------------
Total amount of Dividends
Resolution (scheduled) dividends per share Record date
-------------------------------------------------------------------------------
Ordinary General Meeting of
Shareholders (June 27, 2007) Yen 10,950 million Yen 15.00 March 31, 2007
-------------------------------------------------------------------------------
NOTES TO DEFERRED TAX ACCOUNTING
Major factors giving rise to deferred tax assets include denial of reserve for
retirement benefits and denial of reserve for bonuses, while major factors
giving rise to deferred tax liabilities are gains on establishment of
retirement benefit trust and unrealized holding gains/losses on other
securities.
NOTES TO LEASED FIXED ASSETS
The Company uses fixed assets in the balance sheets and certain office
equipment and production facilities, etc. under finance lease contracts without
ownership transfer.
-37-
NOTES TO RELATED PARTY TRANSACTIONS
(Unit: millions of yen)
Relation with company
------------------------------------------------------------------------------------------------------------------------
Balance
as of the
fiscal
Voting rights year
held by Transaction under
Name of company, Company Concurrent Description of amount Account review
Attribute etc. (%) Directors Business relation transactions (Note 3) item (Note 3)
------------------------------------------------------------------------------------------------------------------------
Subsidiary Tohoku Ricoh (Possessed) Yes Manufacturing Purchase of 53,403 Accounts 18,894
Co., Ltd. Directly: of the products payable -
100% Company's (Note 1) trade
office
equipment
Subsidiary Ricoh Sales Co., (Possessed) Yes Sale of the Sales of 185,919 Accounts 41,415
Ltd. Directly: Company's products receivable
100% office (Note 1) - trade
equipment
Subsidiary Ricoh Chubu (Possessed) Yes Sale of the Sales of 47,250 Accounts 10,810
Co., Ltd. Directly: Company's products receivable
100% office (Note 1) - trade
equipment
Subsidiary Ricoh Kansai (Possessed) Yes Sale of the Sales of 80,403 Accounts 17,877
Co., Ltd. Directly: Company's products receivable
100% office (Note 1) - trade
equipment
Subsidiary Ricoh Leasing (Possessed) Yes Leasing of the Factoring 72,771 Accounts -
Co., Ltd. Directly: Company's Lending of payable -
46.9% products funds other
Indirectly: Lending of (Note 2) 1,321,418 Short- 65,746
4.2% funds term
loans
Long- 106,000
term
loans
Subsidiary RICOH (Possessed) Yes Manufacturing Sales of 59,754 Accounts 22,801
INDUSTRIE Directly: of the components receivable
FRANCE S.A.S. 100% Company's (Note 1) - trade
office
equipment
Subsidiary RICOH (Possessed) Yes Sale of the Sales of 78,146 Accounts 25,394
CORPORATION Directly: Company's products receivable
100% office (Note 1) - trade
equipment
Subsidiary RICOH (Possessed) Yes Sale of the Sales of 80,694 Accounts 14,838
EUROPE B.V. Directly: Company's products receivable
100% office (Note 1) - trade
equipment
Subsidiary NRG GROUP (Possessed) Yes Sale of the Sales of 59,247 Accounts 14,949
PLC Directly: Company's products receivable
100% office (Note 1) - trade
equipment
Subsidiary RICOH ASIA (Possessed) Yes Sale of the Purchase of 101,283 Accounts 8,623
INDUSTRY Directly: Company's products payable -
LTD. 90.0% office (Note 1) trade
equipment
------------------------------------------------------------------------------------------------------------------------
Notes: Transaction conditions and policy in determining transaction conditions
1. Prices and other transaction conditions are determined through price
negotiations, taking into account the market situation.
2. Lending is determined each time through negotiations based on market prices.
3. The transaction amount does not include the consumption tax, while the
ending balance includes the consumption tax, etc.
NOTES TO PER-SHARE INFORMATION
1. Net assets per share: Yen 1,020.29
2. Basic net income per share: Yen 98.48
Diluted net income per share: Yen 97.69
-38-
[English Translation of the Auditors' Report Originally Issued in the Japanese
Language]
INDEPENDENT AUDITORS' REPORT
----------------------------
May 15, 2007
The Board of Directors
Ricoh Company, Ltd.
KPMG AZSA & Co.
Teruo Suzuki (Seal)
Designated and Engagement Partner
Certified Public Accountant
Ryoji Fujii (Seal)
Designated and Engagement Partner
Certified Public Accountant
Mikihiro Himeno (Seal)
Designated and Engagement Partner
Certified Public Accountant
We have audited the statutory report, comprising the non-consolidated balance
sheet, the non-consolidated statement of income, the statement of changes in
net assets and the notes to non-consolidated financial statement, and its
supporting schedules of Ricoh Company, Ltd. as of March 31, 2007 and for the
107th business year from Arpil 1, 2006 to March 31, 2007 in accordance with
Article 436(2)(1)of the Corporate Law. The statutory report and supporting
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on the statutory report and supporting
schedules based on our audit as independent auditors.
We conducted our audit in accordance with auditing standards generally accepted
in Japan. Those auditing standards require us to obtain reasonable assurance
about whether the statutory report and supporting schedules are free of
material misstatement. An audit is performed on a test basis, and includes
assessing the accounting principles used, the method of their application and
estimates made by management, as well as evaluating the overall presentation of
the statutory report and supporting schedules. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the statutory report and supporting schedules referred to above
present fairly, in all material respects, the financial position and the
results of operations of Ricoh Company, Ltd. for the period, for which the
statutory report and supporting schedules were prepared, in conformity with
accounting principles generally accepted in Japan.
Our firm and engagement partners have no interest in the Company which should
be disclosed pursuant to the provisions of the Certified Public Accountants Law
of Japan.
-39-
Transcript of the Corporate Auditor's Report (originally issued in Japanese)
CORPORATE AUDITOR'S REPORT
The Board of Corporate Auditors has prepared this Audit Report upon discussion
based on the audit reports prepared by each Corporate Auditor concerning the
execution of duties by Directors for the fiscal year from April 1, 2006 to
March 31, 2007, and hereby reports as follows:
1. AUDITING METHODS EMPLOYED BY CORPORATE AUDITORS AND THE BOARD OF CORPORATE
AUDITORS
The Board of Corporate Auditors prescribed audit policies, work shares and
other relevant matters, received reports from each Corporate Auditor on their
implementation of audits and results thereof, as well as reports from
Directors, etc. and the Accounting Auditor on the performance of their duties,
and requested explanations from them whenever necessary.
Each Corporate Auditor complied with the auditing standards of Corporate
Auditors established by the Board of Corporate Auditors, followed the audit
policies, work shares, etc., communicated with Directors, staff of the internal
audit sector, other employees, etc., strove to establish the environment for
collecting information and auditing, attended Board of Directors and other
important meetings, received reports from Directors, employees, etc. on the
execution of their duties, requested explanations from them whenever necessary,
inspected important written approvals, etc., examined the status of operations
and assets at the head office and principal offices. We also monitored and
verified the system for ensuring that the execution of duties by Directors
conforms to the related laws and regulations and the Articles of Incorporation,
the resolution of the Board of Directors concerning the establishment of the
system stipulated in Article 100, Paragraph 1 and Paragraph 3 of the
Enforcement Regulations of the Corporate Law aiming to secure the
appropriateness of joint-stock companies' operations; and the status of an
internal control system established in accordance with the said resolution.
Meanwhile, we communicated and exchanged information with Directors, Corporate
Auditors, etc. of subsidiaries, received reports from subsidiaries on
operations whenever necessary, as well as visited and examined some
subsidiaries. Based on the above methods, we examined the business report and
the supporting schedules for the fiscal year under review.
Besides, we monitored and verified whether the Accounting Auditor implemented
appropriate audits while maintaining independence, received reports from the
Accounting Auditor on the execution of their duties, and sought explanations
whenever necessary. Furthermore, we received notice from the Accounting Auditor
that "System for ensuring that duties are performed properly" (matters set
forth in each item of Article 159 of the CompanyAccounting Regulations) is
organized in accordance with the "Quality Management Standards Regarding
Audits" (Business Accounting Council; October 28, 2005), etc., and sought
explanations whenever necessary. Based on the above methods, we examined
non-consolidated financial statements (balance sheets, statements of income,
statements of changes in shareholders' equity, and notes to financial
statements) and the supporting schedules for the fiscal year under review, as
well as consolidated financial statements (balance sheets, statements of
income, statements of changes in shareholders' equity, and notes to financial
statements).
2. AUDIT RESULTS
(1) RESULTS OF AUDIT OF BUSINESS REPORT, ETC.
(i) We hereby state that the business report and the supporting schedules
fairly represent the Company's conditions in accordance with the related
laws and regulations and the Articles of Incorporation.
(ii) With regard to the performance of duties by Directors, we find no
significant evidence of wrongful act or violation of related laws and
regulations, nor the Articles of Incorporation.
(iii) We hereby state that the content of the resolution by the Board of
Directors concerning the internal control system is proper. In addition,
we find no matters on which to remark in regard to the execution of
duties by the Directors regarding the internal control system.
(2) RESULTS OF AUDIT OF NON-CONSOLIDATED FINANCIAL STATEMENTS AND THE
SUPPORTING SCHEDULES
We hereby state that the audit methods of the Accounting Auditor, KPMG AZSA &
Co., and the results are appropriate.
(3) RESULTS OF AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS
We hereby state that the audit methods of the Accounting Auditor, KPMG AZSA &
Co., and the results are appropriate.
May 16, 2007
The Board of Corporate Auditors, Ricoh Company, Limited
Full-time Corporate Auditors:
Kohji Tomizawa (seal), Shigekazu Iijima (seal)
Corporate auditors:
Kenji Matsuishi (seal), Takehiko Wada (seal)
Note: Corporate auditors Kenji Matsuishi and Takehiko Wada are outside
corporate auditors in accordance with Article 2, Item 16 and Article 335,
Paragraph 3 of the Corporate Law.
-40-
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Millions of yen
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For the year ended
March 31,
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2007 2006
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1. Cash flows from operating activities
Net income 111,724 97,057
Income/loss from discontinued operations,
net of tax (5,500) (2,035)
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Income from continuing operations 106,224 95,022
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization of
tangible and intangible fixed assets 89,632 84,089
Changes in assets and liabilities (32,086) (14,829)
Other, net 3,527 9,197
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Net cash provided by operating
activities 167,297 173,479
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2. Cash flows from investing activities
Expenditures for property, plant and
equipment, net (85,284) (98,703)
Process from sales of available-for-sale
securities, net (1,071) 3,013
Other, net (29,077) (24,361)
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Net cash used in investing activities (115,432) (120,051)
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3. Cash flows from financing activities
Change in borrowings, indebtedness and debt
securities, net 29,678 (32,383)
Dividend payments (18,240) (16,178)
Payment for purchase of treasury stock (799) (10,653)
Other, net (1,357) (775)
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Net cash provided (used in) financing
activities 9,282 (59,989)
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4. Net increase in cash and cash equivalents
from discontinued operations 825 3,376
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5. Effect of exchange rate changes on cash and
cash equivalents 6,710 3,383
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6. Net increase (decrease) in cash and cash
equivalents 68,682 198
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7. Cash and cash equivalents at beginning of
year 187,055 186,857
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8. Cash and cash equivalents at end of period 255,737 187,055
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Note: As a result of the sale of business, cash flows from the discontinued
operations have been reclassified in accordance with Statement of
Financial Accounting Standards No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets."
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REFERENCE MATERIAL FOR GENERAL MEETING OF SHAREHOLDERS
AGENDA 1: APPROPRIATION OF RETAINED EARNINGS
We propose the appropriation of retained earnings to be as follows:
1. YEAR-END DIVIDENDS
Year-end dividends for the current term will be paid in consideration of
earnings results for the business term and the strengthening of our corporate
structure as well as outlook for future operations.
(1) Type of dividend assets
Cash
(2) Matters concerning allocation of dividend assets and the total amount
We propose a year-end dividend of Yen 15 per common share of the Company,
up Yen 3 per share from previous fiscal year-end. The total amount of
dividends will be Yen 10,950,115,245.
Accordingly, an annual dividend for the business term, a total of interim
and year-end dividends, amounts to Yen 28 per share.
(3) Effective date for the commencement of dividend payment from retained
earnings
We propose the effective date for commencement of dividend payment to be
June 28, 2007.
2. APPROPRIATION OF OTHER RETAINED EARNINGS
(1) Items of retained earnings to increase and the amount
(i) General reserve: Yen 49,000,000,000
(ii) Reserve for social contributions: Yen 95,500,000
(2) Items of retained earnings to decrease and the amount
(i) Retained earnings carried forward: Yen 49,095,500,000
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AGENDA 2: ELECTION OF ONE (1) CORPORATE AUDITOR
As the tenure of office of a Corporate Auditor Mr. Kenji Matsuishi will expire
at the conclusion of this General Meeting of Shareholders, the Company proposes
the appointment of one (1) Corporate Auditor at this meeting.
The Board of Corporate Auditors has given its consent to this agenda.
The candidate for the Corporate Auditor is as follows:
Brief personal profile
(the other corporate name and position
thereof when thecandidate is a Number of the
Name representative Director of other Company's
(Date of birth) corporation;with an asterisk) shares held
---------------------------------------------------------------------------
Kenji Matsuishi Apr. 1965 Graduated from the National 2,000
(July 24, 1937) Legal Training and Research
Feb. 1972 Institute
Jun. 1994 Legal registration as a
Japanese attorney
Joined Takano & Higuchi Legal
Services
General Manager of Matsuishi
Legal Services (Current)
Corporate Auditor of the
Company (Current)
Notes:
1. There is no conflict of interests between the candidate and the Company.
2. Mr. Kenji Matsuishi is a candidate for Outside Corporate Auditor.
3. Given his insight and longstanding experience as a lawyer, we have judged
that Mr. Kenji Matsuishi is the appropriate person as an Outside Corporate
Auditor of the Company. Hence, we propose him as an Outside Corporate Auditor.
4. Mr. Kenji Matsuishi has served as an Outside Corporate Auditor of the
Company for 13 years.
5. Mr. Kenji Matsuishi is currently an Outside Corporate Auditor of the
Company, and has concluded with the Company a liability limitation contract to
limit liabilities at higher of either of 5,000,000 yen or minimum liability
limit amount stipulated in Article 425, Paragraph 1 of the Corporate Law. If
the candidate is approved to be reappointed, the Company will continue a
liability limitation contract with him to limit liabilities for damages as
above.
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AGENDA 3: ELECTION OF ONE (1) SUBSTITUTE CORPORATE AUDITOR
The Company proposes to appoint Mr. Satoshi Itoh as a substitute outside
Corporate Auditor for outside Corporate Auditors Mr. Kenji Matsuishi and
Mr. Takehiko Wada, so that audit operations can be carried out continuously
even in a case where the number of Corporate Auditors falls below the number
required by law.
The above appointment shall be effective only before the candidate assumes as
outside Corporate Auditors, and may be nullified by resolution of the Board of
Directors with consent of the Board of Corporate Auditors.
The Board of Corporate Auditors has given its consent to this agenda.
The candidate for the substitute outside Corporate Auditor is as follows:
Brief personal profile Number of
(the other corporate name and position thereof when the the
Name candidate is a Company's
(Date of birth) representative Director of other corporation; with an asterisk) shares held
---------------------------------------------------------------------------------------------------
Satoshi Itoh Jan. 1967 Joined Japan Office, Arthur Anderson 0
(July 25, 1942)
Mar. 1967 Finished Master's Course, Graduate School of Commerce, Chuo
University
Dec. 1970 Registered as Certified Public Accountant
Sep. 1978 Partner of Arthur Anderson
Sep. 1993 Representative Partner of Asahi & Co.
Aug. 2001 Retired from Arthur Anderson and Asahi & Co.
Apr. 2002 Professor of Graduate School of International Accounting,
Specialty Graduate School (presently Professional Graduate
School), Chuo University
Mar. 2007 Retired as Professor, Graduate School, Chuo University
Notes:
1. There is no conflict of interests between the candidate and the Company.
2. Mr. Satoshi Itoh is a candidate for substitute Corporate Auditor for Outside
Corporate Auditors.
3. Although the candidate has never been directly involved in any company
management, given his insight and longstanding experience as a certified public
accountant, we have judged that the candidate Mr. Satoshi Itoh is the
appropriate person as a Corporate Auditor of the Company. Hence, we propose him
as a substitute Corporate Auditor.
4. If Mr. Satoshi Itoh is approved to be appointed as a Corporate Auditor of
the Company, the Company will conclude a liability limitation contract with him
to limit liabilities for damages at higher of either, 5,000,000 yen or minimum
liability limit amount stipulated in Article 425, Paragraph 1 of the Corporate
Law.
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AGENDA 4: PAYMENT OF RETIREMENT ALLOWANCES FOR DIRECTORS AND CORPORATE AUDITORS
FOLLOWING THE ABOLISHMENT OF THE RETIREMENT ALLOWANCE SYSTEM
At its Board of Directors meeting held on March 30, 2007, the Company decided
to abolish the retirement allowance system for its executives at the conclusion
of this Ordinary General Meeting of Shareholders after reviewing officers'
remuneration system as part of management reforms. On the abolishment, the
Company will pay incumbent Directors and Corporate Auditors final retirement
allowances corresponding to their tenures and services until the end of
Ordinary General Meeting of Shareholders in accordance with the standards
prescribed by the Company. Such Directors include Masamitsu Sakurai, Shiro
Kondo, Koichi Endo, Masayuki Matsumoto, Katsumi Yoshida, Takashi Nakamura,
Kazunori Azuma, Zenji Miura, Kiyoshi Sakai, Takaaki Wakasugi and Takuya Goto,
and Corporate Auditors are Kohji Tomizawa, Shigekazu Iijima, Kenji Matsuishi
and Takehiko Wada. The Company requests that the amount of final retirement
allowance is a total sum of Yen 473,500,000 for Directors (including Yen
3,700,000 for two Outside Directors) and a total sum of Yen 25,400,000 for
Corporate Auditors (including Yen 11,200,000 for two Outside Corporate
Auditors) in accordance with the standards prescribed by the Company, and, the
details such as specific amounts, manner of payment be left to the decision of
the Board of Directors regarding the Directors and to the conference of
Corporate Auditors regarding to the Corporate Auditors. The timing of payment
shall be when they retire.
The brief personal profile of the relevant Directors and Corporate Auditors are
as follows:
Name Brief personal profile
------------------------------------------------------------------------------
Masamitsu Sakurai Jun. 1992 Director of the Company
Jun. 1994 Managing Director of the Company
Apr. 1996 President and Representative Director of the
Jun. 2005 Company
Apr. 2007 Representative Director of the Company (Current)
President of the Company
Chairman of the Company (Current)
Shiro Kondo Jun. 2003 Managing Director of the Company
Jun. 2005 Director of the Company
Apr. 2007 Corporate Executive Vice President of the Company
Representative Director of the Company (Current)
President of the Company (Current)
Koichi Endo Jun. 1992 Director of the Company
Jun. 1997 Managing Director of the Company
Jun. 2000 Executive Managing Director of the Company
Jun. 2005 Director of the Company (Current)
Corporate Executive Vice President of the
Company (Current)
Masayuki Matsumoto Jun. 1994 Director of the Company
Oct. 1998 Managing Director of the Company
Jun. 2002 Executive Managing Director of the Company
Jun. 2005 Director of the Company (Current)
Corporate Executive Vice President of the
Company (Current)
Katsumi Yoshida Jun. 2002 Managing Director of the Company
Jun. 2005 Director of the Company (Current)
Corporate Executive Vice President of the
Company (Current)
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Name Brief personal profile
------------------------------------------------------------------------------
Takashi Nakamura Jun. 2004 Managing Director of the Company
Jun. 2005 Director of the Company (Current)
Jan. 2006 Corporate Executive Vice President of the Company
(Current)
Kazunori Azuma Jun. 2003 Managing Director of the Company
Jun. 2005 Director of the Company (Current)
Corporate Executive Vice President of the Company
(Current)
Zenji Miura Jun. 2004 Managing Director of the Company
Jun. 2005 Director of the Company (Current)
Corporate Executive Vice President of the Company
(Current)
Kiyoshi Sakai Jun. 2006 Director of the Company (Current)
Corporate Executive Vice President of the Company
(Current)
Takaaki Wakasugi Jun. 2005 Director of the Company (Current)
Takuya Goto Jun. 2006 Director of the Company (Current)
Kohji Tomizawa Jun. 2004 Corporate Auditor of the Company (Full-time)
(Current)
Shigekazu Iijima Jun. 2006 Corporate Auditor of the Company (Full-time)
(Current)
Kenji Matsuishi Jun. 1994 Corporate Auditor of the Company (Current)
Takehiko Wada Jun. 2001 Corporate Auditor of the Company (Current)
Notes:
1. Mr. Takaaki Wakasugi and Mr. Takuya Goto are Outside Directors.
2. Mr. Kenji Matsuishi and Mr. Takehiko Wada are Outside Corporate Auditors.
3. Details of revisions for officers' remuneration system are as follows:
(1) At the conclusion of the General Meeting of Shareholders, retirement
allowance system will be abolished.
(2) Following the abolishment of the retirement allowance system, a stock
price-linked remuneration system (for the purpose of acquiring own
shares) will be introduced as part of monthly remuneration for
Directors (excluding Outside Directors).
(3) Following the abolishment of the retirement allowance system, the
Company will enhance the linkage of bonuses for Directors (excluding
Outside Directors) with the Company's performance, and expand the
ratio of the performance-linked bonus in overall bonuses.
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AGENDA 5: REVISION OF REMUNERATION FOR DIRECTORS
The total amount of remuneration for Directors of the Company has remained
unchanged since it was approved at within Yen 36.0 million per month at the
82nd Ordinary General Meeting of Shareholders on June 29, 1982. However, the
economic situation has changed thereafter, and the Company is expected to adopt
a stock price-linked remuneration system following the proposed abolishment of
the retirement allowance system. Given these circumstances, the Company
proposes that the total amount of Directors' remuneration be modified to within
Yen 46.0 million per month (including up to Yen 4 million per month for Outside
Directors).
At present, the number of Directors is eleven (11) (including two
(2) Outside Directors).
The amount of Directors' remuneration, as in the past, does not include
employee wages for Directors who are also employees.
AGENDA 6: PAYMENT OF BONUSES TO DIRECTORS
The Company proposes that bonuses amounting to Yen 185.0 million be paid to the
incumbent nine (9) Directors (excluding Outside Directors) as of the end of the
fiscal year under review, considering the Company's earnings results and other
factors. The Company requests that the details such as specific amounts, timing
and manner of payment be left to the decision of the Board of Directors.
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EXERCISE OF VOTING RIGHTS VIA THE INTERNET
1. Website the Company Designated for Exercising Voting Rights via the Internet
Please access http://www.web54.net.
--------------------
Please note that you would not be able to use cellular phones as
terminal for exercising voting rights via the Internet.
2. You will need "Voting right exercise code" and "Password," both shown in the
voting form.
3. When you access the designated website, you are requested to decide a new
eight-digit password. Please prepare the eight-digit password in advance.
4. Expenses incurred when accessing the designated website (ISP access charges,
communication charges (call charges) by a carrier, etc.) shall be borne by
shareholders.
PASSWORD:
1. Please keep secret the new password you chose because it is necessary to
identify you as the eligible shareholder. If you forget or lose the
password, you will not be able to exercise your voting right and to change
approval or disapproval for the agenda you voted via the Internet. (We are
sorry we will not be able to answer questions you may ask regarding new
password.)
2. The voting right exercise code and password that we present this time are
valid only for this ordinary general meeting of shareholders. (We will issue
a new password for the next meeting.)
Please direct your inquiries regarding personal computer operations to exercise
your voting right via the Internet to:
Exclusive Information Site for Ricoh:
http://www.ricoh.com/IR/contact.html
-------------------------------------
FOR INSTITUTIONAL INVESTORS:
If shareholders apply in advance for the use of the platform operated by ICJ,
Inc. a joint venture set up by the Tokyo Stock Exchange, Inc. and other
companies, for exercising voting rights, they may be able to utilize said
platform as a method for exercising voting rights in electronic medium, in
addition to the exercise of voting rights via the Internet specified above.
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