-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WeNPmeEjvCpxah5SepuJYOt8lrhOp0EEK/j7YLXsOSq6J3IOfh0IjZw+l1JG9xPM 6BGkEeHc/5nBF8wjFvf77A== 0000317891-08-000020.txt : 20080604 0000317891-08-000020.hdr.sgml : 20080604 20080604065326 ACCESSION NUMBER: 0000317891-08-000020 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20080604 FILED AS OF DATE: 20080604 DATE AS OF CHANGE: 20080604 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RICOH CO LTD CENTRAL INDEX KEY: 0000317891 STANDARD INDUSTRIAL CLASSIFICATION: PHOTOGRAPHIC EQUIPMENT & SUPPLIES [3861] IRS NUMBER: 000000000 STATE OF INCORPORATION: M0 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 002-68279 FILM NUMBER: 08879162 BUSINESS ADDRESS: STREET 1: 13-1, GINZA 8-CHOME STREET 2: CHUO-KU CITY: TOKYO 104-8222 JAPAN STATE: M0 ZIP: 00000 BUSINESS PHONE: 81-3-6278-5241 MAIL ADDRESS: STREET 1: 13-1, GINZA 8-CHOME STREET 2: CHUO-KU CITY: TOKYO 104-8222 JAPAN STATE: M0 ZIP: 00000 6-K 1 r6k080604.txt NOTICE OF 108TH ORDINARY GENERAL MEETING OF SHAREHOLDERS 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, 2008 COMMISSION FILE NUMBER 2 - 68279 RICOH COMPANY, LTD. ------------------- (TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH) 13-1, GINZA 8-CHOME, CHUO-KU, TOKYO 104-8222, JAPAN --------------------------------------------------- (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-__ ) - -------------------------------------------------------------------------------- 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. -------------------------------------------- (Registrant) Date: June 4, 2008 By: /S/Takashi Nakamura ----------------------------------------- Name: Takashi Nakamura Title: Director Corporate Executive Vice President CHO(Chief Human Resource Officer) General Manager of Personnel Division (TRANSLATION) (Securities Code: 7752) June 4, 2008 NOTICE OF 108TH ORDINARY GENERAL MEETING OF SHAREHOLDERS Dear Shareholder, The Company would hereby like to inform you that the 108th 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 Ordinary General Meeting of Shareholders" and exercise your voting right in writing or via the Internet no later than 5:30 p.m., Wednesday, June 25, 2008. [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 52. 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: Thursday, June 26, 2008, 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, 2008 (from April 1, 2007 to March 31, 2008) 2. The Non-Consolidated Financial Statements for the fiscal year ended March 31, 2008 (from April 1, 2007 to March 31, 2008) -1- ITEMS TO BE RESOLVED: Agenda 1: Appropriation of retained earnings Agenda 2: Election of eleven (11) Directors Agenda 3: Election of two (2) Corporate Auditors Agenda 4: Election of one (1) Substitute Corporate Auditor Agenda 5: 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 Ordinary General Meeting of Shareholders, Business Report, Consolidated and Non-consolidated Financial Statements, such revision 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. -2- 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 108th business term, from April 1, 2007 to March 31, 2008. Consolidated net sales rose 7.3% year on year to Yen 2,219.9 billion in the fiscal year ended March 31, 2008. The increase is attributable mainly to strong sales of multifunction printers (MFPs) mainly with color functions, and laser printers, at home and abroad. Net income amounted to Yen 106.4 billion, down 4.7% from a year earlier, due chiefly to the foreign exchange loss, with its negative effects increased in the latter half of the fiscal year. With regard to dividends, an interim dividend of Yen 16 per share is already disbursed and a dividend of Yen 17 per share, up Yen 2 per share from a year earlier, at the end of the term will be proposed (total of Yen 33 for the fiscal year) at the 108th 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 Yen 2.26 trillion and net income of Yen 108 billion in the fiscal year ending March 31, 2009. Under the 16th Mid-Term Business Plan in which we announce our vision of the three years from the fiscal year ended March 2009, the Ricoh Group strove to achieve further growth and development through creation of new customer value and highly efficient business operations. By implementing these initiatives, we aim to meet the expectations of our shareholders. We look forward to your support and encouragement to the Company from now on. Sincerely, June 2008 Masamitsu Sakurai, Chairman of the Board and Representative Director Shiro Kondo, Representative Director, President and Chief Executive Officer -3- Reference Documents Attached to Notice of 108th Ordinary General Meeting of Shareholders BUSINESS REPORT FOR 108TH BUSINESS TERM (April 1, 2007 to March 31, 2008) (The following is an unofficial English translation of the Reports for the 108th 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 .. Business Environment In the fiscal year under review, the Japanese economy experienced a downturn due in part to skyrocketing crude oil prices, fluctuations in stock and foreign exchange markets and a downturn in the housing sector. The U.S. economy slowed down affected by the negative effects of the subprime mortgage crisis. Meanwhile, the European economy enjoyed stable growth in general, and Chinese, other Asian and Oceania economies continued to expand despite some slowdown. .. Ricoh Group Vision Ricoh Group announced a long term goal "Winner in the 21st Century" (Establishment of global brand), and aims to gain the strong trust of customers by continually contributing to greater customer productivity and knowledge creation, thereby continuing to grow and develop. To these ends, Ricoh is promoting business activities in order to provide innovative products and services for all customers based on the Ricoh values of "Harmonize with the environment", "Simplify your life & work", and "Support knowledge management". .. Status of Office Solutions In the previous 15th Mid-Term Business Plan - the last year of which was the fiscal year under review - in order to create a stronger earnings foundation in general office copying equipment and printers, Ricoh has made an effort to shift from monochrome to color, incorporated advanced digital technologies, and progressed to network capable equipment, providing solutions which meet the needs of customer business environments. Ricoh also positioned the production printing market and low-end market as new growth areas, and is actively developing these businesses. .. New Products from Office Solutions Ricoh continually creates new color multifunction machines and color laser printers, among others, further enhancing the product line in the fiscal year under review. As a high-speed digital color multifunction machine, Ricoh launched the "imagio MP C7500/6000 (sold overseas as: Aficio C7500/C6000)", which reduces its standard power consumption to the half of existing machines, and produces higher quality images by adopting -4- "New color PxP toner". We also launched the "imagio Neo 753RC/603RC", with a recycle parts mass ratio of 88%, and by incorporating Ricoh's unique energy conservation technologies "HYBRID QSU" and "QSU", is far below the recommended power consumption level determined in green purchasing criteria. By achieving excellent environmental performance, higher image quality, and advanced security functions in these new product launches, Ricoh's stronger product line has led it to attain large market shares in color copier/multifunction equipment markets in Japan and overseas. In the low-end printer market, Ricoh launched the "IPSiO SP C220 (sold overseas as: Aficio SP C220N)", a color laser printer priced similar to black & white printers, which adopts a compact and stylish design and achieves high productivity, printing black & white or color at 16 pages/minute. It can be utilized in a variety of situations, as a high performance color laser printer used at small offices and shop service desks, on an office desktop, or as a shared printer for small work groups. Also, further progress has been made in the unique GELJET technology which combines the advantages of both ink jet and laser technologies. Ricoh launched the "IPSiO GX 3000SF/GX3000S (sold overseas as: Aficio GX3000SF/GX3000S/3050sfn)". This is a color multifunction machine compatible with A4-size papers for business users (offering a maximum of four functions in one machine: printer, copier, scanner and fax), which achieves higher quality images, higher speed printing, low cost, energy conservation, and saves space. (IPSiO GX3000S/Aficio GX 3000S does not have facsimile functions.) With these new products, Ricoh continues to create the new low-end business color market. .. Establishment of InfoPrint Solutions Company, LLC To expand business in the production printing market, Ricoh established a joint venture company with IBM Corporation, "InfoPrint Solutions Company, LLC" in June 2007 (the plan is to make it a wholly owned subsidiary of the Company in 2010). The company will start operating with about 1,200 employees worldwide, and the plan is to add about 1,400 printer maintenance staff in June 2008. By combining the service, software and IT solutions held by the new company with Ricoh Group's strengths in the development and production of hardware andsoftware, Ricoh will be in a position to provide all sizes of customers with output solutions for office printing, industrial printing, large printing systems, and commercial printing environments. .. Further improvement of customer satisfaction J.D. Power Asia Pacific, Inc. is an international institute specialized in customer satisfaction surveys. In its "2007 Japan Printer Satisfaction Study", Ricoh achieved 1st place in both color printers and black & white printers. Ricoh also achieved the highest evaluation in J.D. Power's "2007 Japan Copier/Multifunction Product Customer Satisfaction Study", for both color machines and black & white machines. Furthermore, Ricoh Technosystems Co., Ltd. received the highest evaluation for system planning and construction 2 years in a row, in its "2007 Japan Solution Provider Satisfaction Study". Ricoh will further strengthen its highly evaluated products, sales handling, support, and services, and advance its efforts from the customer's standpoint. .. Status of Industrial Products In the industrial market, a new factory for the thermal media business began operating in -5- China, enabling more stable product supply for the China market, in which large growth is expected. Also, in the semiconductor business, products such as Ricoh's power supply ICs for mobile phones have attained leading global market shares. .. Structural reform Ricoh continued to strengthen its business foundations in this period. In sales and services, Ricoh combined companies in each region of the USA, Europe, and Japan, working to strengthen its sales organization, and to increase business efficiency. In development, at the Ricoh Technology Center which combines the design and development functions, we are promoting design and development process innovation by a cross-functional organization, and rapidly achieving higher development efficiency. Furthermore, in the production front, Ricoh has continuously been improving the production process and developing into each production line, thereby achieving further cost reductions. .. Performance in the fiscal year under review Net sales amounted to Yen 2,219.9 billion, up 7.3% from a year earlier. Operating income was up 4.1% year on year to Yen 181.5 billion, income from continuing operations before income tax was up 0.1% from the previous year to Yen 174.6 billion. Net income from continuing operations increased by 0.2% from the previous corresponding period, to Yen 106.4 billion. Net income decreased by 4.7% from net income including gain from the sale of the discontinued operations of Yen 5.5 billion for the previous corresponding period. .. Overview of the 16th Mid-Term Business Plan In its 16th Mid-Term Business Plan, commencing the year ending March 31, 2009, Ricoh shall put even more emphasis on customer viewpoints, and continue providing products and services which exceed customer expectations. Especially in the office solutions area, Ricoh Group plans to utilize its strengths such as customer contact abilities, excellent product line, ability to propose solutions, global business development abilities, and image processing technologies, to respond to increasingly diverse needs of more customers, and strengthen its business foundations. Specifically, "Work flow", "Security", "TCO (Total Cost of Ownership)", "Compliance", and "Environment" are important issues for customers. Ricoh will focus on these to provide greater customer value. Ricoh will construct and apply document solutions with networked printing solutions by efficiently networking multiple copying machines and printers, and systems with centralized storage of documents, search, and output by file servers, and thereby contribute to raising customer productivity and knowledge creation. Ricoh is providing better color laser printer and GELJET printer products to boost growth of its low-end business and rapidly establish the production printing business, thus expanding its business areas in the printing market. Furthermore, Ricoh is aiming at creating new service businesses (business process outsourcing). In the industrial market, allocation of business resources is focused on businesses where large growth is expected. Ricoh will put efforts into strengthening cooperation between technical fields and business areas in order to combine diverse fields and create new businesses. Ricoh is also making further advances in business development in emerging markets, in -6- both the office solutions market and the industrial market. Finally, in order to increase or create customer value and boost earning power in each business field, it is important to secure competitive superiority through technology. Ricoh will continue to actively work to strengthen its technical abilities. CONSOLIDATED SALES BY CATEGORY (CONSOLIDATED BASIS) Category Sales (billions of yen) Percentage of total Change (%) - ------------------------------------------------------------------------------- Imaging Solutions 1,709.4 77.0 8.2 Network System Solutions 200.0 9.0 3.0 Office Solutions 1,909.5 86.0 7.6 Industrial Products 144.3 6.5 8.2 Other 166.0 7.5 3.1 Total 2,219.9 100.0 7.3 - ------------------------------------------------------------------------------- Japan 1,016.0 45.8 1.4 Overseas 1,203.9 54.2 12.9 The Americas 434.7 19.6 2.0 Europe 603.2 27.2 18.9 Other 165.9 7.4 24.7 - ------------------------------------------------------------------------------- OFFICE SOLUTIONS (up 7.6% year on year to Yen 1,909.5 billion) Net sales in the Office Solutions segment which consists of Imaging Solutions and Network System Solutions increased by 7.6% from the previous corresponding period, to Yen 1,909.5 billion despite the stiff competition against other manufacturers regarding the color equipment and solution business. Imaging Solutions (up 8.2% year on year to Yen 1,709.4 billion) Trends in consolidated net sales (billions of yen) FY 2007 1580.1 FY 2008 1709.4 FY 2009(E) 1751.5 Imaging Solution: Digital copiers, color copiers, analog copiers, digital duplicators, facsimile machines, diazo copiers, scanners, multi-functional printers (MFP), printers and software Sales of PPCs, MFPs and printers, mainly color equipment, increased both in Japan and overseas due to its expanding product lines and enhanced solution sales structures. The new color MFP products launched as a standard new-generation color model played a large role in this sales increase. Overall sales increased by 8.2% from the previous corresponding period, to Yen 1,709.4 billion. -7- Network System Solutions (up 3.0% year on year to Yen 200.0 billion) Trends in consolidated net sales (billions of yen) FY 2007 194.3 FY 2008 200.0 FY 2009 (E) 205.0 Network System Solutions: Personal computers, PC servers, network systems and network related software The increase in sales of IT services was due to the expansion of solution business. The sales of personal computers and PC servers increased slightly in Japan. As a result, sales in this category increased by 3.0% from the previous corresponding period, to Yen 200.0 billion. INDUSTRIAL PRODUCTS (up 8.2% year on year to Yen 144.3 billion) Trends in consolidated net sales (billions of yen) FY 2007 133.3 FY 2008 144.3 FY 2009 (E) 143.5 Industrial Products: Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Net sales in the Industrial Products segment increased by 8.2% from the previous corresponding period, to Yen 144.3 billion. Sales in semiconductors, thermal media as well as electric components increased. OTHER (up 3.1% year on year to Yen 166.0 billion) Trends in consolidated net sales (billions of yen) FY 2007 161.0 FY 2008 166.0 FY 2009(E) 160.0 Other: Optical discs and digital camera Net sales in this category increased by 3.1% from the previous corresponding period, to Yen 166.0 billion. Sales of digital cameras increased both in Japan and overseas in addition to good performance of the financing services in Japan. -8- (II) PLANT AND EQUIPMENT INVESTMENT In the fiscal period under review, the Ricoh Group invested a total of Yen 85.2 billion (including an investment of Yen 33.3 billion by the Company) in plant and equipment, mainly comprising the following. (a)Major equipment and facility expansions completed during the fiscal year: Plant annexes to design and develop printer and electronic components (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 There were no issues to be noted. (VI) STATUS OF ACQUISITION OF OTHER COMPANIES' STOCKS AND OTHER EQUITIES Ricoh Group acquired the equity stake (51%) of InfoPrint Solutions Company, LLC on June 1, 2007. Ricoh intends to increase its investment gradually, and acquire 100% of said company ultimately. Details are described in the "Overview" in the section "(i) Operating progress and results." (2) STATUS OF ASSETS AND PROFIT/LOSS IN THREE BUSINESS YEARS Transition of assets and profit/loss of the Ricoh Group
- ---------------------------------------------------------------------------------------------------------- Fiscal year Fiscal year Fiscal year Fiscal year ended ended ended ended Items March 2005 March 2006 March 2007 March 2008 - ---------------------------------------------------------------------------------------------------------- Net sales (billions of yen) 1,807.4 1,909.2 2,068.9 2,219.9 Income from continuing operations before income tax (billions of yen) 130.9 152.7 174.5 174.6 Net income (billions of yen) 83.1 97.0 111.7 106.4 Net income per share (yen) 112.64 132.33 153.10 146.04 Total assets (billions of yen) 1,953.6 2,041.1 2,243.4 2,214.3 Net assets (billions of yen) 862.9 960.2 1,070.9 1,080.1 - ----------------------------------------------------------------------------------------------------------
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 in the fiscal year ended March 2007, the operating results from the discontinued operations have been reclassified in the figure before fiscal year ended March 2006 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. -9- Transition of assets and profit/loss of the Company
- --------------------------------------------------------------------------------- Fiscal year Fiscal year Fiscal year Fiscal year ended ended ended ended Items March 2005 March 2006 March 2007 March 2008 - --------------------------------------------------------------------------------- Net sales (billions of yen) 897.2 934.3 1,033.3 1,036.2 Ordinary income (billions of yen) 62.7 82.4 105.2 79.5 Net income (billions of yen) 41.9 55.0 71.9 54.6 Net income per share (yen) 56.64 74.81 98.48 74.99 Total assets (billions of yen) 949.5 982.5 1,076.2 1,067.8 Net assets (billions of yen) 659.9 694.7 744.8 761.2 - ---------------------------------------------------------------------------------
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 ended March 2007, 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." (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, Ltd. 5,000 million JPY 100.0 Manufacturing and sale of office equipment Ricoh Elemex Corporation 3,456 million JPY 56.0 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., Ltd. Maintenance service and sale of office 2,128 million JPY 100.0 equipment Ricoh Leasing Company, Ltd. 7,896 million JPY 51.1 General leasing RICOH ELECTRONICS, INC. Manufacturing of office equipment and related 27 million USD 100.0 supplies RICOH AMERICAS CORPORATION 286 million USD 100.0 Sale of office equipment InfoPrint Solutions Company, LLC (Note 2) 59.2 Sale of office equipment RICOH EUROPE HOLDINGS PLC Holding company of sales in the European 0.9 million GBP 100.0 region RICOH ASIA INDUSTRY LTD. 180 million HKD 100.0 Sale of office equipment
Notes: 1. The respective percentage of total investment ratio for Ricoh Elemex Corporation, Ricoh Leasing Company, Ltd., RICOH ELECTRONICS, INC., InfoPrint Solutions Company, LLC include voting rights of those shares held by subsidiaries. 2. No description was made since the company is a limited liability company in the U.S. laws, and there are no accounting items which completely correspond to the paid-in capital. 3. RICOH EUROPE HOLDINGS PLC is a holding company established for the purpose of business restructuring in the European region. -10- (4) ISSUES THE RICOH GROUP FACES Customer needs are increasingly diversifying. It is increasingly difficult to satisfy customers' needs by providing prices and functions of purchased products or specific services. There is also diverse and increasingly harsh competition in color equipment and solutions development. In this rapidly changing market environment, in order for Ricoh Group to continually achieve growth and development and establish a global brand, we consider it most important to thoroughly execute "Creation of customer value" and "High efficiency management", and thereby enhance our competitive strength as a company to gain greater trust of customers. In "Creation of customer value", Ricoh will increasingly practice active discovery of new value by "Customer Satisfaction Management", in addition to Ricoh's unique abilities to pursue the 3 customer values of "Harmonize with the environment", "Simplify your life & work", and "Support knowledge management". That is, Ricoh will strive further to provide products and services which help customers contribute to global environmental conservation, pursue ease of use which enables customers to thoroughly utilize products and services, support knowledge creation activities by customers, and create environments for knowledge creation. Ricoh will continue working for "High efficiency management" of the overall group. By promoting structural innovations in development, production, sales, etc., selecting businesses for complete focus, and improved business processes, Ricoh will boost earnings power of the overall group and individual businesses. We recognize that another vital issue is ensuring that results of early investments towards growth lead to earnings. Furthermore, by investing profits created in business areas and stronger technologies where large growth is expected, Ricoh will work to improve its performance, further growing its corporate value. (5) MAIN BUSINESS (as of March 31, 2008) 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. -11- (6) PRINCIPAL OFFICES AND PLANTS (as of March 31, 2008) 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 Pref.) Ricoh Tohoku Co., Ltd. (Miyagi Pref.) Research and Development Center Ricoh Sales Co., Ltd. (Tokyo) (Kanagawa Pref.) Atsugi Plant (Kanagawa Pref.) Ricoh Chubu Co., Ltd. (Aichi Pref.) Hadano 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 Company, Ltd. (Tokyo) Yashiro Plant (Hyogo Pref.) Major overseas offices SUBSIDIARIES (LOCATION) SUBSIDIARIES (LOCATION) - ------------------------------------------------------------------------------- RICOH AMERICAS CORPORATION (U.S.A.) RICOH ELECTROICS, INC. (U.S.A.) InfoPrint Solutions Company, LLC RICOH UK PRODUCTS LTD. (U.K.) (U.S.A.) RICOH EUROPE 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 DIGITAL EQUIPMENT CO., LTD. (China) Note: RICOH EUROPE PLC provides the integrated functions for sales companies in Europe. (7) STATUS OF EMPLOYEES (as of March 31, 2008) (I) EMPLOYEES OF THE RICOH GROUP Office Industry Common solutions products Other businesses in Classification business business businesses the group Total - ---------------------------------------------------------------------------- Number of employees 75,254 3,421 3,751 1,030 83,456 (II) EMPLOYEES OF THE COMPANY Number of Change from previous Average Average employees fiscal year age length of service - ---------------------------------------------------------------------------- 11,295 8 (Decrease) 41.4 18.2 years -12- 2. SHAREHOLDERS' EQUITY (as of March 31, 2008) (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: 41,250 (4) MAJOR SHAREHOLDERS:
Name The shareholders' stake in the Company - ------------------------------------------------------------------------------------------------------------------ Thousands of shares Investment ratio (%) The Master Trust Bank of Japan, Ltd. (Trust Account) 72,314 9.71 Japan Trustee Services Bank, Ltd. (Trust Account) 41,110 5.52 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 36,193 4.86 Nippon Life Insurance Company 35,906 4.82 NIPPONKOA Insurance Co., Ltd. 18,193 2.44 State Street Bank and Trust Company 16,422 2.20 THE NEW TECHNOLOGY DEVELOPMENT FOUNDATION 15,839 2.13 National Mutual Insurance Federation of Agricultural Cooperatives 11,947 1.60 Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account) 11,509 1.55 State Street Bank and Trust Company 505103 10,809 1.45
Notes: 1. The number of treasury stocks (23,960 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 350,858 224 47.10 Foreign companies 265,204 638 35.60 Individual investors and others 54,016 39,642 7.25 Other domestic companies 33,371 686 4.47 Treasury stock 23,960 1 3.21 Securities companies 17,501 59 2.34
-13- 3. STATUS OF STOCK ACQUISITION RIGHTS The status of "Euro Yen Zero Coupon Convertible Bonds due 2011 (bonds with stock acquisition rights)" which the Company issued on December 7, 2006 was as follows. Issue: Euro Yen Zero Coupon Convertible Bonds due 2011 (bonds with stock acquisition rights) Number of new stock acquisition rights: 55,000 Applicable type of shares: Common stock Applicable number of shares: 19,741,071 shares Conversion period: On or after December 21, 2006 Up to and including November 23, 2011 Conversion price: Yen 2,800 (Note 1) Conditions of new stock acquisition (Note 2) rights: Notes: 1. The Conversion Price shall be adjusted by the following formula in case Ricoh issues or disposes of treasury shares at a price below the then market price of its common stock after the issuance of the Convertible Bonds. "Number of Outstanding Shares" in the following formula means the total outstanding number of the shares of common stock of Ricoh (excluding the number of treasury shares). Conversion Price After Adjustment = Conversion Price Before Adjustment X (Number of outstanding Shares + [Number of Shares to be issued or disposed] X [Amount to be paid per Share / Market price per Share]) / (Number of outstanding Shares + Number of Shares to be issued or disposed) Appropriate and necessary adjustments to the Conversion Price will also be made in certain cases including in case of stock splits or consolidation of the common stock of Ricoh, the issuance of stock acquisition rights (including stock acquisition rights attached to bonds with stock acquisition rights) exercisable into the common stock of Ricoh at less than market price. 2: No Stock Acquisition Right may be exercised in part. Prior to (but not including) December 8, 2006, a Convertible Bond holder may exercise the Stock Acquisition Rights only if, as of the last Trading Day (as defined below) of any calendar quarter, the Closing Price of the common stock of Ricoh for any 20 Trading Days during a period of 30 consecutive Trading Days ending on the last Trading Day of such quarter is more than 120% of the Conversion Price in effect on such Trading Day. However, such calculation shall not be made for the calendar quarter commencing on October 1, 2010. On and after December 8, 2010, a Convertible Bond holder may exercise the Stock Acquisition Rights at any time after the Closing Price of the common stock of Ricoh on at least one Trading Day falling on and after December 8, 2010 is more than 120% of the Conversion Price in effect on such Trading Day. -14- 4. STATUS OF CORPORATE OFFICERS (1) DIRECTORS AND CORPORATE AUDITORS (as of March 31, 2008)
Principal duty, representative Position Name status at other companies - -------------------------------------------------------------------------------- Chairman of the Board Masamitsu Sakurai Chairman of Japan Association of and Representative Corporate Executives Director: President and Shiro Kondo CEO Representative Director: Director: Koichi Endo Management Strategy, Management Innovation; Office Business Strategic Planning, Production Printing Business; General Manager of Fact Base Management Innovation Office Director: Masayuki Matsumoto Domestic Marketing, Corporate Social Responsibility Director: Katsumi Yoshida Overseas Marketing Director: Takashi Nakamura Personnel, Production, and Legal Affairs and Intellectual Property Director: Kazunori Azuma General Manger of Marketing Group Director: Zenji Miura Finance, Information, IR, Corporate Communication, Management of Group Companies, Internal Management and Control; General Manager of Corporate Planning Division Director: Kiyoshi Sakai Technology, Corporate Environment Director: Takaaki Wakasugi Professor, Faculty of Business Administration, Tokyo Keizai University 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. Director: Takuya Goto Chairman of the Board, Kao Corporation Chairman of Japan Marketing Association 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 Chairman and Representative Director of San-Ai Oil Co., Ltd.
Notes: 1. Directors Takaaki Wakasugi and Takuya Goto are Outside Directors stipulated in Article 2-15 of the Corporate Law. 2. Corporate Auditors Kenji Matsuishi and Takehiko Wada are Outside Corporate Auditors stipulated in Article 2-16 of the Corporate Law. 3. Serving at the Company's accounting and finance sector for many years, Corporate Auditor Shigekazu Iijima has considerable knowledge about finance and accounting. 4. The "Principal duty, representative status at other companies" of Directors Koichi Endo, Takashi Nakamura and Kiyoshi Sakai will be revised effective April 1, 2008, as follows: Koichi Endo: Management Strategy Takashi Nakamura: Personnel; General Manager of Human Resources Division Kiyoshi Sakai: Technology, Corporate Environment, Legal Affairs and Intellectual Property -15- (2) TOTAL REMUNERATION, ETC. PAID TO DIRECTORS AND CORPORATE AUDITORS
Amount of remuneration paid Category Number of recipients (million yen) ----------------------------------------------------------------------------- Directors 11 521 (Outside Directors) (2) (18) Corporate Auditors 4 55 (Outside Corporate Auditors) (2) (9) ----------------------------------------------------------------------------- Total 15 577 -----------------------------------------------------------------------------
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 108th Ordinary General Meeting of Shareholders to be held on June 26, 2008, amounting to Yen 173 million. 3. In addition to the above remuneration, the Company plans to pay retirement allowance, amounting to Yen 2 million, to one Corporate Auditor who will resign at the conclusion of 108th General Meeting of Shareholders held on June 26, 2008. This payment is based on the resolution "Payment of retirement allowances for Directors and Corporate Auditors following the abolishment of the retirement allowance system" of the 107th Ordinary General Meeting of Shareholders held on June 27, 2007. (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 Position Name operations or outside Director, at other companies - --------------------------------------------------------------------------------------------------------------------------- Outside Director Takaaki Wakasugi Emeritus Professor, the University of Tokyo Professor, Faculty of Business Administration, Tokyo Keizai University 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. Outside Corporate Auditor, JFE Holdings, Inc. Outside Corporate Auditor, NTT DoCoMo, Inc. Outside Director Takuya Goto Chairman of the Board, Kao Corporation Outside Director, Asahi Glass Co., Ltd. Outside Director, Nagase & Co., Ltd. Chairman of Japan Marketing Association Outside Corporate Kenji Matsuishi General Manager of Matsuishi Legal Services Auditor Outside Corporate Takehiko Wada Chairman and Representative Director of San-Ai Oil Co., Ltd. Auditor
Notes: 1. There is no special conflict of interests between the Company and Kao Corporation. 2. There is no special conflict of interests between the Company and San-Ai Oil Co., Ltd. -16- (ii) Major activities by outside Directors and Corporate Auditors
Position Name Main activities - ----------------------------------------------------------------------------------------------- Outside Director Takaaki Wakasugi Participated in 13 of the 14 Board of Directors meetings held during the fiscal year under review, and proactively made statements, mainly from his expert perspective as a scholar of finance and a governance specialist. Outside Director Takuya Goto Participated in 9 of 14 Board of Directors meetings held during the fiscal year under review, and proactively made statements, mainly from the perspective of a highly-experienced manager. Outside Corporate Kenji Matsuishi Participated in 10 of the 14 Board of Directors meetings Auditor and all 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 7 of the 14 Board of Directors meetings and Auditor 8 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. -17- 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 Yen 173 million Total sum of remuneration, etc. to be paid to the accounting auditor by the Company and its subsidiaries Yen 346 million
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 Financial Instruments 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. Among the Company's major subsidiaries, Ricoh Americas Corporation and other 4 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. -18- 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. (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. -19- (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 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. -20- (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 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. -21- CONSOLIDATED BALANCE SHEETS (as of March 31, 2008) Millions of yen ------------------------------------------------------------------------------ As of March 31, ------------------------------------------------------------------------------ 2008 2007 ------------------------------------------------------------------------------ ASSETS Current Assets: Cash and cash equivalents 170,607 255,737 Time deposits 1,531 1,417 Trade receivables: Notes 57,068 66,474 Accounts 463,999 450,231 Less-Allowance for doubtful receivables (16,666) (16,555) Total trade receivables 504,401 500,150 Current maturities of long-term finance receivables, net 194,642 193,087 Inventories: Finished goods 117,658 113,379 Work in process and raw materials 74,365 70,975 Total inventories 192,023 184,354 Other current assets 60,936 65,347 Total Current Assets 1,124,140 1,200,092 Fixed Assets: Property, plant and equipment: Land 46,681 47,007 Buildings and structures 235,106 227,900 Machinery and equipment 587,956 636,577 Construction in progress 12,884 12,512 Less-Accumulated depreciation (627,994) (659,328) Total property, plant and equipment 254,633 264,668 Investment and other assets: Long-term finance receivables, net 445,436 435,874 Investment securities 71,244 74,836 Investment in and advances to affiliates 1,977 15,608 Goodwill 112,538 72,048 Other intangible assets 114,402 81,925 Lease deposits and other 89,998 98,355 Total investment and other assets 835,595 778,646 Total Fixed Assets: 1,090,228 1,043,314 ------------------------------------------------------------------------------ Total Assets 2,214,368 2,243,406 =============================================================================== -22- CONSOLIDATED BALANCE SHEETS (as of March 31, 2008) Millions of yen - ------------------------------------------------------------------------------- As of March 31, - ------------------------------------------------------------------------------- 2008 2007 - ------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-term borrowings 75,784 91,673 Current maturities of long-term indebtedness 82,658 87,174 Trade payables- Notes 18,942 25,000 Accounts 341,627 342,211 Total trade payables 360,569 367,211 Accrued income taxes 28,909 46,194 Accrued expenses and other 165,836 143,360 Total Current Liabilities 713,756 735,612 Long-term Liabilities: Long-term indebtedness 225,930 236,801 Accrued pension and severance costs 99,830 99,028 Deferred income taxes 36,373 44,183 Total Long-term Liabilities: 362,133 380,012 Total Liabilities 1,075,889 1,115,624 Minority Interests 58,283 56,869 Shareholders' Investment Common stock 135,364 135,364 Additional paid-in capital 186,448 186,454 Retained earnings 835,238 752,398 Accumulated other comprehensive income (loss) (31,005) 26,998 Treasury stock (45,849) (30,301) Total shareholders' investment 1,080,196 1,070,913 - ------------------------------------------------------------------------------- Total Liabilities, Minority Interests and Shareholders' Investment 2,214,368 2,243,406 =============================================================================== -23- CONSOLIDATED STATEMENTS OF INCOME (for the year ended March 31, 2008) Millions of yen ------------------------------------------------------------------------------ For the year ended March 31, ------------------------------------------------------------------------------ 2008 2007 ------------------------------------------------------------------------------ Net sales 2,219,989 2,068,925 Cost of sales 1,292,262 1,206,519 Gross profit 927,727 862,406 Selling, general and administrative expenses 746,221 688,026 Operating income 181,506 174,380 Other (income) expenses 6,837 (139) Interest and dividend income (6,341) (5,501) Interest expenses 4,835 7,350 Foreign exchange gain and loss, net 10,901 1,199 Others, net (2,558) (3,187) Income from continuing operations before income taxes, minority interests and equity in earnings of affiliates 174,669 174,519 Provision for income taxes: Current 63,396 66,523 Deferred 58,426 (2,197) Total income taxes 4,970 64,326 Minority interests (6,057) (5,508) Equity in earnings of affiliates 1,247 1,539 ------------------------------------------------------------------------------ Income from continuing operations 106,463 106,224 Income from discontinued operations, net of tax -- 5,500 Net income 106,463 111,724 =============================================================================== -24- CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT (for the year ended March 31, 2008)
(Unit: millions of yen) - ----------------------------------------------------------------------------------------------------------------------- Accumulated Additional other Total Common paid-in Retained comprehensive Treasury Shareholders' stock capital earnings income (loss) stock Investment - ----------------------------------------------------------------------------------------------------------------------- Beginning balance 135,364 186,454 752,398 26,998 (30,301) 1,070,913 - ----------------------------------------------------------------------------------------------------------------------- Cumulative effect of adjustments resulted from applying EITF06-2 (Note) -- -- (995) -- -- (995) - ----------------------------------------------------------------------------------------------------------------------- Beginning balance (after adjustment) 135,364 186,454 751,403 26,998 (30,301) 1,069,918 Gains (Losses) on disposal of treasury stock (6) (6) Dividends declared and approved (22,628) (22,628) Comprehensive income (loss) Net income 106,463 106,463 Net unrealized holding gains (losses) on available-for-sale securities (7,685) (7,685) Pension liability adjustments (11,382) (11,382) Net unrealized gains (losses) on derivative instruments (380) (380) Cumulative translation adjustments (38,556) (38,556) - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive income (loss) 48,460 Net changes in treasury stocks (15,548) (15,548) - ----------------------------------------------------------------------------------------------------------------------- Ending balance 135,364 186,448 835,238 (31,005) (45,849) 1,080,196 - -----------------------------------------------------------------------------------------------------------------------
Note: EITF 06-02: Emerging Issues Task Force ("EITF") Issue No. 06-2, "Accounting for Sabbatical Leave and Other Similar Benefits Pursuant to Financial Accounting Standards Board ("FASB") Statement No. 43 'Accounting for Compensated Absences'" -25- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS * All figures are rounded off to nearest million yen. Accounting Policies Regarding the Preparation of Consolidated Financial Statements SCOPE OF CONSOLIDATION 1. ITEMS RELATED TO SCOPE OF CONSOLIDATION (1) NUMBER OF CONSOLIDATED SUBSIDIARIES: 279 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 33 companies in scope of consolidation, and excluded 26 companies from scope of consolidation. InfoPrint Solutions Company, LLC and RICOH EUROPE HOLDINGS PLC are among companies which were included in the scope of consolidation, and LANIER WORLDWIDE, INC. is among companies which were excluded from the scope of consolidation. 2. APPLICATION OF THE EQUITY METHOD (1) NUMBER OF COMPANIES TO WHICH THE EQUITY METHOD IS APPLIED: 38 Name of major companies to which the equity method is applied: Edisys 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 13 companies from application of equity method. SINDO RICOH CO., LTD is 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. -26- 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 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. -27- (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 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. (Change in significant accounting policies) 1. In June 2006, the FASB ratified the EITF consensus on EITF Issue No.06-2, "Accounting for Sabbatical Leave and Other Similar Benefits Pursuant to Financial Accounting Standards Board ("FASB") Statement No. 43 'Accounting for Compensated Absences'". Accordingly, Ricoh recorded an increase in accrued expenses of Yen 1,680 million as of April 1, 2007, with a reduction of the beginning balance of retained earnings of Yen 995 million. 2. On April 1, 2007, Ricoh adapted FASB's Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109" (hereafter, "FIN 48"). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with FASB Statement No. 109 "Accounting for Income Taxes." The adoption of FIN 48 did not have any material effects on Ricoh's business results or financial position. NOTES TO CONSOLIDATED BALANCE SHEETS 1. Allowance for doubtful receivables related to long-term finance receivables: Yen 10,535 million 2. Accumulated comprehensive other income (loss) includes accumulated foreign currency translation adjustments, unrealized holdings gains (losses) on available-for-sale securities, unrealized gain (loss) on derivative instruments , and pension liability adjustments. 3. Pledged assets and liabilities: (1) Pledged assets: Property, plant and equipment: Yen 2,782 million Leasing receivables: Yen 418 million (2) Pledged liabilities Yen 465 million 4. Guarantee obligation including employees' housing loans: Yen 453 million -28- 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 17.00; total amount of dividend: Yen 12,256 million; base date: March 31, 2008) for the 108th Ordinary General Meeting of Shareholders to be held on June 26, 2008. 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: Commonstock: 19,741,071 shares NOTES TO PER-SHARE INFORMATION 1. Net assets per share: Yen 1,498.29 2. Basic net income per share: Yen 146.04 Diluted net income per share: Yen 142.15 -29- [English Translation of the Auditors' Report Originally Issued in the Japanese Language] INDEPENDENT AUDITORS' REPORT ---------------------------- May 14, 2008 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 Junichi Adachi (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, 2007 to March 31, 2008 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, 2008 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). 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 41). -30- NON-CONSOLIDATED BALANCE SHEETS (as of March 31, 2008) Millions of yen - ------------------------------------------------------------------------------- As of March 31, - ------------------------------------------------------------------------------- 2008 2007 - ------------------------------------------------------------------------------- ASSETS Current Assets: Cash on hand and in banks 15,563 23,602 Notes receivable - trade 7,353 7,221 Accounts receivable - trade 234,545 244,754 Marketable securities 23,396 118,046 Finished goods 23,633 24,026 Raw materials 3,422 3,146 Work in process 8,822 7,578 Supplies 7,993 7,248 Deferred tax assets 12,097 16,206 Accounts receivable - other 14,817 16,678 Short-term loans receivable 124,117 74,131 Other current assets 5,788 5,960 Allowance for doubtful accounts (112) (239) Total Current Assets 481,437 548,362 Fixed Assets: Tangible fixed assets: Buildings 50,313 50,073 Structures 2,536 2,600 Machinery and equipment 23,786 24,721 Vehicles 16 13 Tools 18,745 20,689 Land 29,030 29,274 Construction in progress 9,596 5,085 Total tangible fixed assets 134,024 132,457 Intangible fixed assets: Leasehold right and others 21,377 11,279 Software 22,028 20,484 Total Intangible fixed assets 43,405 31,764 Investments and Other Assets: Investment securities 26,356 26,995 Affiliates' securities 251,990 189,463 Investment in affiliates 19,293 27,488 Long-term loans receivable 96,878 106,858 Deferred tax assets 623 1,788 Lease deposit 6,674 6,811 Other investments 7,718 4,799 Allowance for doubtful accounts (526) (501) Total investments and other assets 409,008 363,705 Total Fixed Assets 586,438 527,927 - ------------------------------------------------------------------------------- Total Assets 1,067,876 1,076,290 =============================================================================== -31- NON-CONSOLIDATED BALANCE SHEETS (as of March 31, 2008) Millions of yen - ------------------------------------------------------------------------------- As of March 31, - ------------------------------------------------------------------------------- 2008 2007 - ------------------------------------------------------------------------------- LIABILITIES Current Liabilities: Notes payable - trade 3,837 5,017 Accounts payable - trade 142,479 146,776 Bonds maturing within one year 25,000 -- Accounts payable - other 15,939 17,331 Accrued expenses 35,375 35,954 Accrued corporate tax, etc. 8,556 24,939 Reserve for bonuses 13,129 14,154 Reserve for Directors' bonuses 173 185 Warranty reserve 774 612 Other current liabilities 4,416 5,163 Total Current Liabilities 249,682 250,134 Fixed Liabilities: Bonds -- 25,000 Convertible Bonds 55,201 55,256 Long accounts payable-other 498 -- Retirement benefit obligation 710 616 Reserve for Directors' retirement allowances -- 466 Other fixed liabilities 568 -- Total Fixed Liabilities 56,978 81,339 Total Liabilities 306,660 331,474 (Net Assets) Stockholders' 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 180,804 180,808 Retained Earnings: Legal reserve 14,955 14,955 Other retained earnings 469,754 437,714 Reserve for deferral of capital gain on property 486 506 Reserve for special depreciation 691 1,147 Reserve for warranty on computer programs 89 124 Reserve for social contributions 103 104 General reserve 411,350 362,350 Retained earnings brought forward 57,034 73,482 Total Retained Earnings 484,709 452,669 Treasury stock (45,687) (30,114) Total Stockholders' Equity 755,191 738,727 Difference of appreciation and conversion Net unrealized holding gains on securities 6,024 6,088 Total difference of appreciation and conversion 6,024 6,088 Total Net Assets 761,216 744,815 - ------------------------------------------------------------------------------- Total Liabilities and Net Assets 1,067,876 1,076,290 =============================================================================== -32- NON-CONSOLIDATED STATEMENTS OF INCOME (for the year ended March 31, 2008) Millions of yen ------------------------------------------------------------------------------ For the year ended March 31, ------------------------------------------------------------------------------ 2008 2007 ------------------------------------------------------------------------------ Net sales 1,036,228 1,033,302 Cost of sales 722,865 712,757 Gross profit on sales 313,362 320,545 Selling, general and administrative expenses 242,862 233,571 Total operating income 70,500 86,974 Non-operating income: Interest and dividend income 20,607 20,173 Other revenue 5,447 4,534 Total non-operating revenue 26,054 24,707 Non-operating expenses: Interest expenses 496 636 Exchange loss 14,649 1,550 Other expenses 1,823 4,263 Total non-operating expenses 16,969 6,450 Ordinary income 79,585 105,231 Extraordinary income: Reversal of allowance for doubtful accounts -- 3,632 Total extraordinary income -- 3,632 Net income before taxes 79,585 108,864 Corporate, inhabitant and enterprise taxes 19,600 38,800 Corporate and other tax adjustments 5,316 (1,844) Net income 54,669 71,908 ============================================================================== -33- STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (for the year ended March 31, 2008) (Unit: millions of yen) - ----------------------------------------------------------------------------------------------------------------------------- Difference of appreciation and Stockholders' equity conversion - ------------------------------------------------------------------------------------------------------------------- Additional paid-in-capital Retained earnings -------------------------- ------------------ Net Other Other Total unrealized Legal additional retained share- holding Common capital paid-in- Legal earnings Treasury holders' gains on Total net stock reserve capital reserve (Note) stock equity securities assets - ----------------------------------------------------------------------------------------------------------------------------- Balance of March 31, 2007 135,364 180,804 3 14,955 437,714 (30,114) 738,727 6,088 744,815 Changes in the term Dividends from surplus (22,627) (22,627) (22,627) Net income 54,669 54,669 54,669 Purchase of treasury stock (15,769) (15,769) (15,769) Disposal of treasury stock (3) (2) 197 191 191 Net changes of items other than stockholders' equity (63) (63) Total changes in the term -- -- (3) -- 32,040 (15,572) 16,463 (63) 16,400 Balance of March 31, 2008 135,364 180,804 -- 14,955 469,754 (45,687) 755,191 6,024 761,216 - -----------------------------------------------------------------------------------------------------------------------------
Note: Breakdown of other retained earnings (Unit: millions of yen)
- --------------------------------------------------------------------------------------------------------------------------------- Reserve for Retained Reserve for warranty earnings deferral of Reserve for on Reserve for to capital gain special computer social General brought on property depreciation programs contributions reserve forward Total - --------------------------------------------------------------------------------------------------------------------------------- Balance of March 31, 2007 506 1,147 124 104 362,350 73,482 43,714 Changes in the term Dividends from surplus (22,627) (22,627) Reversal of reserve for deferral of capital gain on property (20) 20 -- Transfer to reserve for special depreciation 20 (20) -- Reversal of reserve for special depreciation (476) 476 -- Reversal of reserve for warranty on computer programs (35) 35 -- Transfer to reserve for social contribution 95 (95) -- Reversal of reserve for social contribution (96) 96 -- Transfer to general reserve 49,000 (49,000) -- Disposal of treasury stock (2) (2) Net income 54,669 54,669 Total changes in the term (20) (456) (35) (1) 49,000 (16,447) 32,040 Balance of March 31, 2008 486 691 89 103 411,350 57,034 469,754 - ---------------------------------------------------------------------------------------------------------------------------------
34 NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS * All figures are rounded down to nearest million yen. 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. -35- 5. BASIS FOR PROVISION OF RESERVES (1) ALLOWANCE FOR DOUBTFUL ACCOUNTS: 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. 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: -36- 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. 9. REVISION ON ACCOUNTING SETTLEMENT Change of Depreciation Method for fixed assets Effective as of April 1, 2007, in accordance with the revised Japanese Corporate Tax Law in 2007, Ricoh changed method of depreciation of tangible fixed assets acquired on or after April 1, 2007. The change in method of depreciation caused an increase in depreciation expense by Yen 2,778 million for the fiscal year ended March 31, 2008. 10. ADDITIONAL INFORMATION Change of Depreciation Method for fixed assets Effective as of April 1, 2007, in accordance with the revised Japanese Corporate Tax Law in 2007, Ricoh changed method of depreciation of tangible fixed assets acquired on or before March 31, 2007. Attributable to this change, its fixed assets are further depreciable up to Yen 1 over five years after they have been depreciated up to the depreciable limit (95% of the acquisition price). The change in method of depreciation caused an increase in depreciation expense by Yen 1,603 million for the fiscal year ended March 31, 2008. NOTES TO NON-CONSOLIDATED BALANCE SHEETS 1. Accumulated depreciation on tangible fixed assets: Yen 383,853 million 2. Guarantee obligation: Bank borrowings for employees' housing funds, etc: Yen 108 million 3. Monetary debts and credits for affiliates: Short-term receivable due from affiliates: Yen 342,458 million Long-term receivable due from affiliates: Yen 97,227 million Short-term payable due to affiliates: Yen 83,647 million NOTES TO NON-CONSOLIDATED STATEMENTS OF INCOME Transaction with affiliates: Sales: Yen 916,339 million Purchase: Yen 394,290 million Non-operating transactions: Yen 31,722 million NOTES TO STATEMENTS OF CHANGES IN NET ASSETS -37- 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 stocks as of the end of the fiscal year under review Common stock: 23,960,828 shares 3. Dividends of retained earnings (1)Payment of dividends
- -------------------------------------------------------------------------------- Total amount of Dividends Resolution dividends per share Record date - -------------------------------------------------------------------------------- Ordinary General Meeting of Shareholders (June 27, 2007) Yen 10,950 million Yen 15.00 March 31, 2007 Board of Directors meeting (October 25, 2007) Yen 11,677 million Yen 16.00 September 30, 2007 - --------------------------------------------------------------------------------
(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 26, 2008) Yen 12,256 million Yen 17.00 March 31, 2008 - ------------------------------------------------------------------------------- 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. -38- 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 Concurrent Business Description of amount Account review Attribute Compnay, etc. (%) Directors relation transactions (Note 3) item (Note 3) - ------------------------------------------------------------------------------------------------------------------------ Subsidiary Tohoku Ricoh (Possessed) Yes Manufacturing Purchase of Accounts Co., Ltd. Directly: of the products payable 100% Company's (Note 1) - trade office equipment 49,532 17,551 Subsidiary Ricoh Sales Co., (Possessed) Yes Sale of the Sales of Accounts Ltd. Directly: Company's products receivable 100% office (Note 1) - trade equipment 191,620 44,720 Subsidiary Ricoh Chubu (Possessed) Yes Sale of the Sales of Accounts Co., Ltd. Directly: Company's products receivable 100% office (Note 1) - trade equipment 48,949 11,633 Subsidiary Ricoh Kansai (Possessed) Yes Sale of the Sales of Accounts Co., Ltd. Directly: Company's products receivable 100% office (Note 1) - trade equipment 80,042 18,360 Subsidiary Ricoh Leasing (Possessed) Yes Leasing of the Factoring 72,407 Accounts Company, Ltd. Directly: Company's Lending of payable - -- 46.9% products funds other Indirectly: Lending of (Note 2) 893,926 Short- 4.2% funds term loans 123,292 Long- term loans 56,000 Subsidiary RICOH (Possessed) Yes Manufacturing Sales of Accounts INDUSTRIE Directly: of the components receivable FRANCE S.A.S. 100% Company's (Note 1) - trade office equipment 64,965 20,660 Subsidiary RICOH (Possessed) Yes Sale of the Sales of Accounts AMERICAS Directly: Company's products receivable CORPORATION 100% office (Note 1) - trade equipment 74,259 18,751 Subsidiary RICOH (Possessed) No Lending of Lending of Long- PRINTING Directly: funds funds term SYSTEMS 94.5% (Note 2) loans AMERICA, INC. Indirectly: 5.5% 33,929 33,929 Subsidiary RICOH (Possessed) Yes Sale of the Sales of Accounts EUROPE SCM Directly: Company's products receivable B.V. 100% office (Note 1) - trade equipment 121,474 27,967 Subsidiary RICOH ASIA (Possessed) Yes Sale of the Purchase of Accounts INDUSTRY Directly: Company's products payable LTD. 100% office (Note 1) - trade equipment 116,880 8,947
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 1,055.85 2. Basic net income per share: Yen 74.99 Dilutednet income per share: Yen 72.97 -39- [English Translation of the Auditors' Report Originally Issued in the Japanese Language] INDEPENDENT AUDITORS' REPORT ------------------------------ May 14, 2008 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 Junichi Adachi (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, 2008 and for the 108th business year from Arpil 1, 2007 to March 31, 2008 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. -40- 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, 2007 to March 31, 2008, 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 Company Accounting 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 15, 2008 The Board of Corporate Auditors, Ricoh Company, Limited Corporate Auditor Kohji Tomizawa (seal) Corporate Auditor Shigekazu Iijima (seal) Corporate Auditor Kenji Matsuishi (seal) Corporate Auditor 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. -41- CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) Millions of yen - ------------------------------------------------------------------------------- For the year ended March 31, - ------------------------------------------------------------------------------- 2008 2007 - ------------------------------------------------------------------------------- 1. Cash flows from operating activities Net income 106,463 111,724 Income/loss from discontinued operations, net of tax -- (5,500) Income from continuing operations 106,463 106,224 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization of tangible and intangible fixed assets 95,788 89,632 Changes in assets and liabilities (35,896) (32,086) Other, net 28,008 3,527 Net cash provided by operating activities 194,363 167,297 2. Cash flows from investing activities Expenditures for property, plant and equipment, net (84,011) (85,284) Process from sales of available-for-sale securities, net 2,067 (1,071) Other, net (116,406) (29,077) Net cash used in investing activities (198,350) (115,432) 3. Cash flows from financing activities Change in borrowings, indebtedness and debt securities, net (33,148) 29,678 Dividend payments (22,628) (18,240) Payment for purchase of treasury stock (15,770) (799) Other, net (639) (1,357) Net cash provided (used in) financing activities (72,185) 9,282 4. Net increase in cash and cash equivalents from discontinued operations -- 825 5. Effect of exchange rate changes on cash and cash equivalents (8,958) 6,710 6. Net increase (decrease) in cash and cash equivalents (85,130) 68,682 7. Cash and cash equivalents at beginning of year 255,737 187,055 8. Cash and cash equivalents at end of period 170,607 255,737 -42- REFERENCE MATERIAL FOR ORDINARY 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 17 per common share of the Company, up Yen 2 per share from previous fiscal year-end. The total amount of dividends will be Yen 12,256,171,250. Accordingly, an annual dividend for the business term, a total of interim and year-end dividends, amounts to Yen 33 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 27, 2008. 2. APPROPRIATION OF OTHER RETAINED EARNINGS (1)Items of retained earnings to increase and the amount (i) General reserve: Yen 30,000,000,000 (ii) Reserve for social contributions: Yen 96,600,000 (2) Items of retained earnings to decrease and the amount (i) Retained earnings carried forward: Yen 30,096,600,000 43 AGENDA 2: ELECTION OF ELEVEN (11) DIRECTORS As the tenure of office of eleven (11) Directors will expire at the conclusion of this Ordinary General Meeting of Shareholders, the Company proposes the appointment of eleven (11) Directors at this meeting. The candidates for Directors are as follows: Brief personal profile, position and responsibility at the Company Number of the Name (Status of representation at other Company's No. (Date of birth) company, with asterisk) shares held - ------------------------------------------------------------------------------- 1 Masamitsu Sakurai Apr. 1966 Joined the Company 12,000 (January 8, 1942) May 1984 President of Ricoh UK Products Ltd. Apr. 1990 General Manager of Purchasing Division June 1992 Director Apr. 1993 President of Ricoh Europe B.V. June 1994 Managing Director Apr. 1996 President and Representative Director June 2005 Representative Director (Current) President Apr. 2007 Chairman of the Board (Current) Chairman (Current) * Chairman of Japan Association of Corporate Executives (Current) 2 Shiro Kondo Apr. 1973 Joined the Company 8,000 (October 7, 1949) July 1999 Deputy General Manager of Imaging System Business Group June 2000 Senior Vice President Oct. 2000 General Manager of Imaging System Business Group June 2002 Executive Vice President June 2003 Managing Director Oct. 2004 General Manager of MFP Business Group June 2005 Director Corporate Executive Vice President Apr. 2007 Representative Director (Current) President (Current) CEO (Chief Executive Officer) (Current) Brief personal profile, position and responsibility at the Company Number of the Name (Status of representation at other Company's No. (Date of birth) company, with asterisk) shares held - ------------------------------------------------------------------------------- 3 Koichi Endo Apr. 1966 Joined the Company 15,747 (February 16, 1944) Apr. 1987 President of Ricoh Electronics, Inc. Oct. 1990 General Manager of Component Division June 1992 Director June 1997 Managing Director Apr. 1998 General Manager of Production Business Group June 2000 Executive Managing Director Executive Vice President Apr. 2004 General Manager of Fact Base Management Innovation Office June 2005 Director (Current) Corporate Executive Vice President Apr. 2006 CSO (Chief Strategy Officer) (Current) Apr. 2008 Deputy President (Current) 4 Katsumi Yoshida Apr. 1967 Joined the Company 6,100 (August 20, 1944) Feb. 1996 Chairman of Ricoh Electronics, Inc. Apr. 2000 President of Ricoh Corporation Apr. 2001 Executive Vice President June 2002 Managing Director Oct. 2003 General Manager of International Marketing Group Chairman of Ricoh China Co., Ltd. June 2004 Executive Managing Director June 2005 Director (Current) Corporate Executive Vice President CMO (Chief Marketing Officer) (Overseas) (Current) Jan. 2008 * Chairman and CEO (Chief Executive Officer) of Ricoh Americas Corporation (Current) Apr. 2008 Deputy President (Current) 5 Masayuki Matsumoto Apr. 1970 Joined the Company 6,000 (December 10, 1944) July 1993 Manager of Tokyo Branch of Imaging Equipment Marketing Division of Marketing Group June 1994 Director Oct. 1998 Managing Director General Manager of Marketing Group June 2000 Executive Vice President June 2002 Executive Managing Director Apr. 2005 General Manager of Corporate Social Responsibility Division June 2005 Director (Current) Corporate Executive Vice President (Current) CMO (Chief Marketing Officer) (Japan) (Current) Apr. 2007 In charge of Corporate Social Responsibility (Current)
45 Brief personal profile, position and responsibility at the Company Number of the Name (Status of representation at other Company's No. (Date of birth) company, with asterisk) shares held - --------------------------------------------------------------------------------- 6 Takashi Nakamura Apr. 1972 Joined the Company 9,693 (September 2, 1946) Apr. 1990 President of Ricoh UK Products Ltd. Jan. 1995 President of Ricoh Europe B.V. May 1998 Deputy General Manager of Corporate Planning Division June 1998 Director June 2000 Senior Vice President June 2002 President of Ricoh Elemex Corporation June 2004 Managing Director June 2005 Director (Current) Jan. 2006 Corporate Executive Vice President (Current) CHO (Chief Human Resource Officer) (Current) Apr. 2008 General Manager of Personnel Division (Current) 7 Kazunori Azuma Apr. 1971 Joined the Company 8,000 (February 11, 1949) Oct. 1994 President of Hokkaido Ricoh Co., Ltd. June 2000 Senior Vice President Oct. 2000 President of Ricoh Technosystems Co., Ltd. June 2003 Managing Director Executive Vice President Nov. 2003 General Manager of Marketing Group (Current) June 2005 Director (Current) Corporate Executive Vice President (Current) 8 Zenji Miura Apr. 1976 Joined the Company 7,000 (January 5, 1950) Jan. 1993 President of Ricoh France S.A.S. Deputy General Manager of Apr. 1998 Finance and Accounting Division Senior Vice President Oct. 2000 General Manager of Finance and Accounting Division Executive Vice President June 2003 Managing Director June 2004 Director (Current) June 2005 Corporate Executive Vice President (Current) CFO (Chief Financial Officer) (Current) In charge of IR (Current) Apr. 2006 CIO (Chief Information Officer) (Current) In charge of Corporate Communication and Management of Group Companies (Current) General Manager of Corporate Planning Division (Current) In charge of Internal Feb. 2008 Management and Control Division (Current)
-46- Brief personal profile, position and responsibility at the Company Number of the Name (Status of representation at other Company's No. (Date of birth) company, with asterisk) shares held - ------------------------------------------------------------------------------- 9 Kiyoshi Sakai Apr. 1970 Joined the Company 3,000 (December 25, 1945) Jan. 1996 General Manager of Corporate Planning Division June 1996 Director Apr. 1999 General Manager of Research and Development Group June 2000 Senior Vice President June 2002 Managing Director Aug. 2002 General Manager of Corporate Technology Planning Division June 2005 Corporate Senior Vice President Apr. 2006 In charge of Corporate Environment (Current) June 2006 Director (Current) Corporate Executive Vice President (Current) CTO (Chief Technology Officer) (Current) Apr. 2008 * President of Ricoh Innovation, Inc. (Current) In charge of Legal Affairs and Intellectual Property (Current) 10 Takaaki Wakasugi June 1985 Professor, Faculty of 3,000 (March 11, 1943) Economics, the University of Tokyo Sep. 1990 Co-director of Mitsui Life Financial Research Center, University of Michigan Ross School of Business (Current) Apr. 2003 * Director and General Manager of Japan Corporate Governance Research Institute, Inc. (Current) Apr. 2004 Professor, Faculty of Business Administration, Tokyo Keizai University (Current) June 2004 Professor Emeritus, the University of Tokyo (Current) June 2005 Director (Current) 11 Takuya Goto Apr. 1964 Joined Kao Soap Company 0 (August 19, 1940) (renamed Kao Corporation in 1985) June 1990 Director of Kao Corporation July 1991 Managing Director of Kao Corporation June 1996 Executive Managing Director of Kao Corporation June 1997 President of Kao Corporation June 2002 Representative Director and President of Kao Corporation June 2004 Chairman of Kao Corporation (Current) June 2006 Director (Current) Sep. 2007 * Chairman of Japan Marketing Association (Current) Notes: 1. There is no conflict of interests between each candidate and the Company. 2. Messrs. Takaaki Wakasugi and Takuya Goto are the candidates for Outside Directors. 3. With his insight and longstanding experience as a specialist in finance and governance, we have judged that Mr. Takaaki Wakasugi is the appropriate person as a Director of the Company, although he does not have any prior experience with direct management. Hence, we propose him as a Director. 4. With his abundant experience as a management member of Kao Corporation which has been proceeding with proactive management, we have judged that Mr. Takuya Goto is the appropriate person as a Director of the Company. Hence, we propose him as a Director. 5. The tenure of the two Outside Directors, Messrs. Takaaki Wakasugi and Takuya Goto, shall be three -47- years and two years, respectively, from the time of conclusion of this Ordinary General Meeting of Shareholders. 6. The Company will conclude a liability limitation contract with Messrs. Takaaki Wakasugi and Takuya Goto, both the Company's Outside Directors, to limit liabilities for damages at higher of either, Yen 10,000,000 or minimum liability limit amount stipulated in Article 425, Paragraph 1 of the Corporate Law. If both candidates are approved to be reappointed to their current office, the Company will continue the above-mentioned liability limitation contracts with both candidates. -48- AGENDA 3: ELECTION OF TWO (2) CORPORATE AUDITORS As the tenure of office of a Corporate Auditor Mr. Kohji Tomizawa and Takehiko Wada will expire at the conclusion of this Ordinary General Meeting of Shareholders, the Company proposes the appointment of two (2) Corporate Auditors 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, position and responsibility at the Company Number of the Name (Status of representation at other Company's No. (Date of birth) company, with asterisk) shares held - ----------------------------------------------------------------------------------------------------------- 1 Kohji Tomizawa Apr. 1971 Joined the Company 5,000 (May 25, 1946) July 1988 President of Ricoh Finance Ltd. May 1991 Head of Administration Office of System Development Division June 1993 General Manager of Marketing Administration Department of International Division June 1997 Managing Director of Ricoh Logistics System Co., Ltd. June 1999 General Manager of DMS Business Division June 2001 Director of Tokyo Ricoh Co., Ltd. June 2004 Corporate Auditor (Current) 2 Takao Yuhara Apr. 1969 Joined Nippon Chemical Industrial Co., Ltd. 0 (June 7, 1946) May 1971 Joined Sony Corporation Mar. 1987 Vice President of Sony International (Singapore) Ltd. Apr. 1996 Vice President of Display Company of Sony Corporation June 2002 Corporate Vice President and General Manager of Corporate Planning Division of Sony Corporation June 2003 Corporate Vice President and Group CFO (Chief Financial Officer) of Sony Corporation June 2004 In charge of Corporate Executive Finance and IR of Sony Corporation Dec. 2007 Managing Executive Officer and Senior General Manager, Group Business Management Division of ZENSHO CO., LTD. (Current) Apr. 2008 Officer in charge of Group Finance of ZENSHO CO., LTD. (Current)
Notes: 1. There is no conflict of interests between each candidate and the Company. 2. Mr. Takao Yuhara is a candidate for Outside Corporate Auditor. 3. With his abundant experience as executive officer in charge of accounting at other companies, we have judged that Mr. Takao Yuhara is the appropriate person as an Outside Corporate Auditor of the Company. Hence, we propose him as an Outside Corporate Auditor. 4. If Mr. Takao Yuhara is approved to be appointed as Outside Corporate Auditor of the Company, the Company will conclude a liability limitation contract with him to limit liabilities for damages at higher of either, Yen 5,000,000 or minimum liability limit amount stipulated in Article 425, Paragraph 1 of the Corporate Law. 49 AGENDA 4: ELECTION OF ONE (1) SUBSTITUTE CORPORATE AUDITOR The Company proposes to appoint in advance one Outside Corporate Auditor as a Substitute for Outside Corporate Auditors Mr. Kenji Matsuishi, and Mr. Takao Yuhara who will be Outside Corporate Auditor in case Agenda 3 is approved as proposed, 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: Number of Brief personal profile, the Name position and responsibility at the Company Company's (Date of birth) (Status of representation at other company, with asterisk) shares held - ------------------------------------------------------------------------------------------------------- Kiyohisa Horie Apr. 1970 Joined Horie Morita Audit Office (now : Meiji Audit 0 (March 7, 1948) Corporation) Joined Showa Accounting Office Aug. 1980 Registered as Certified Public Accountant Mar. 1988 Registered as Tax Accountant Apr. 1988 Senior Partner of Meiji Audit Corporation(Current) May 1988 * Representative Director of Showa Accounting Office (Current) May 1988 Managing Partner of Meiji Audit Corporation (Current) May 1998 Vice-Chairman & Managing Partner of Meiji Audit Corporation (Current)
Notes: 1. There is no conflict of interests between the candidate and the Company. 2. Mr. Kiyohisa Horie is a candidate for Substitute Corporate Auditor for Outside Corporate Auditors. 3. With his insight and longstanding experience as a certified tax accountant and certified public accountant, we have judged that the candidate Mr. Kiyohisa Horie is the appropriate person as a Corporate Auditor of the Company. Hence, we propose him as a Substitute Corporate Auditor. 4. If Mr. Kiyohisa Horie 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, Yen 5,000,000 or minimum liability limit amount stipulated in Article 425, Paragraph 1 of the Corporate Law. 50 AGENDA 5: PAYMENT OF BONUSES TO DIRECTORS The Company proposes that bonuses amounting to Yen 173.4 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. -51- 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. -52- -----END PRIVACY-ENHANCED MESSAGE-----