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, 2013

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   þ         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    þ

(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 3, 2013

   

By:

 

/s/ Yoshinori Yamashita

     

Name:   Yoshinori Yamashita

     

Title:     Director

     

             Corporate Executive Vice President


To Our Shareholders

We would like to take this opportunity to express our sincere appreciation for our shareholders’ continuous support to us in stating our business report for 113th business term, from April 1, 2012 to March 31, 2013.

Consolidated net sales of the Ricoh Group for the fiscal year under review amounted to ¥1,924.4 billion, which represents an increase of 1.1% from the previous fiscal year, while net income attributable to Ricoh Company, Ltd. amounted to ¥32.4 billion, which represents an increase of ¥77.0 billion from the previous fiscal year. Although severe conditions prevailed in the business environment surrounding the Ricoh Group, including the economic slump resulting from the European debt crisis, sluggish growth in China and other emerging countries, and prolonged appreciation of the yen, we were able to achieve a significant increase in net income compared to the previous fiscal year, thanks to the steady progress in transformation of our business structure to offer new value to customers, and in streamlining through structural reform.

With regard to dividends, we will be proposing a year-end dividend of ¥16.50 per share at the 113th Ordinary General Meeting of Shareholders. In addition to the interim dividend already disbursed, the total dividend for the fiscal year under review would amount to ¥29 per share, an increase of ¥4 from the previous fiscal year.

Although the global economic situation remains uncertain despite the appearance of bright signs for the future in some parts of the Japanese economy, the Ricoh Group seeks to achieve net sales of ¥2,100.0 billion and net income attributable to Ricoh Company, Ltd. of ¥80.0 billion in the fiscal year ending March 31, 2014.

We look forward to your support and encouragement to the Ricoh Group from now on.

 

 

Sincerely,

 

June 2013

 

Shiro Kondo,

 

Representative Director,

Chairman of the Board

 

Zenji Miura,

 

Representative Director,

 

President and CEO

 

- 1 -


The RICOH Way

Founding Principles  — The Spirit of Three Loves

“Love your neighbor”

“Love your country”

“Love your work”

The Ricoh Group takes as its founding principle “the spirit of three loves” put forward by the company founder, Kiyoshi Ichimura, in 1946. This concept informs the work of all Group employees, as we are guided at every level of business by the pursuit of well-being for ourselves, our families, our customers, related parties such as suppliers, and society at large.

Management Principles

Mission Statement:

At the Ricoh Group, we are committed to providing excellence to improve the quality of living.

Vision Statement:

To be the most trusted brand with irresistible appeal in the global market.

Values Statement:

To be one global company, we must care about people, our profession, our society, and our planet.

We must dedicate our winning spirit, innovation and teamwork to sharpen our customer centric

focus, and we also must commit to the highest standards of ethics and integrity.

 

- 2 -


(Translation)

(Securities Code: 7752)

June 3, 2013

NOTICE OF

113TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

Dear Shareholder,

The Company would hereby like to inform you that the 113th Ordinary General Meeting of Shareholders will be held as below, 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 the appended “Reference Material for Ordinary General Meeting of Shareholders” and exercise their voting rights in writing or via the Internet no later than 5:30 p.m., Thursday, June 20, 2013.

 

 

Yours faithfully,

 

Zenji Miura,

 

Representative Director,

President and CEO

 

Ricoh Company, Ltd.

 

1-3-6 Nakamagome, Ohta-ku, Tokyo

 

- 3 -


1. Date and Time:   

Friday, June 21, 2013, from 10:00 a.m. (Reception will start at 9:00 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 the audit of the Consolidated Financial Statements by Accounting Auditors and the Board of Audit & Supervisory Board Members for the fiscal year ended March 31, 2013 (from April 1, 2012 to March 31, 2013)

  

2.      The Non-Consolidated Financial Statements for the fiscal year ended March 31, 2013 (from April 1, 2012 to March 31, 2013)

Items to be resolved:

Agenda 1:

   Appropriation of surplus

Agenda 2:

   Election of one (1) Director

Agenda 3:

   Election of two (2) Audit & Supervisory Board Members

Agenda 4:

   Election of one (1) Substitute Audit & Supervisory Board Member

Agenda 5:

   Payment of bonuses to Directors

4. Treatment of voting rights

 

  (1)

When voting rights are exercised both in writing and via the Internet, the vote received later shall be deemed effective. However, if votes are received 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.

 

 

If there is any revision to the Reference Material for Ordinary General Meeting of Shareholders, Business Report, Consolidated and Non-consolidated Financial Statements, notification of the content of such revision will be given on the Company’s website in the column “To Our Shareholders (Investor Relations / Financial Data)” (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.

 

- 4 -


Reference Material for Ordinary General Meeting of Shareholders

Agenda 1: Appropriation of surplus

The appropriation of surplus will be as follows:

The Company’s basic policy on the distribution of profits to shareholders is to deliver stable dividend payments in consideration of an appropriate level of the dividend payout ratio but also it aims to enhance its retained earnings in pursuit of the strengthening of our corporate structure and new development of operations.

The Company intends to use internal reserve funds intensively for the further development of its core businesses and for investment in growing business areas, with medium to long-term objective of achieving prosperity.

As the Company has achieved a positive income for this fiscal year, we propose a year-end dividend of ¥16.5 per common share of the Company, which represents an increase of ¥8 yen from the previous fiscal year.

1. Year-end dividends

 

(1)

Type of dividend assets

Cash

 

(2)

Matters concerning allocation of dividend assets and the total amount

We propose a year-end dividend of ¥16.5 per common share of the Company. The total amount of dividends will be ¥ 11,963,100,864.

Accordingly, the annual dividend for the current fiscal year, being the total of the interim and year-end dividends, amounts to ¥29 per share.

 

(3)

Effective date of the distribution of surplus

We propose that the effective date of the distribution of surplus be June 24, 2013.

2. Other appropriation of surplus

(1) Item of surplus whose amount is to be increased and the amount thereof

 

Reserve for social contribution:

   ¥  93,608,602   

(2) Item of surplus whose amount is to be decreased and the amount thereof

 

Retained earnings brought forward:

   ¥  93,608,602   

 

- 5 -


Agenda 2: Election of one (1) Director

Director Masamitsu Sakurai retired from the office of Director as of March 31, 2013 by resignation, and Director Hiroshi Kobayashi will retire from the office of Director as of the conclusion of this Ordinary General Meeting of Shareholders by resignation. Accordingly, the Company proposes the appointment of one (1) Director at this meeting.

Since Mr. Kenichi Kanemaru is meant to be a substitute for the retiring Director, the tenure of office of Mr. Kenichi Kanemaru will last until the expiration of the tenure of office of the Directors currently in office in accordance with the Company’s Articles of Incorporation.

The candidate for Director is as follows:

 

Name

(Date of birth)

  

Brief personal profile, position and responsibility at the Company

and significant concurrent positions

   Number of the
Company’s
shares held
 

Kenichi Kanemaru

(November 19, 1952)

  

Apr. 1973

   Joined the Company      9,000   

Newly Appointed

Candidate

  

June 1999

   President of Ricoh UK Products Ltd.   
  

June 2004

   Group Executive Officer, Senior Vice President   
  

Oct. 2004

   Senior Vice President   
  

Apr. 2006

  

General Manager of Imaging System

Production Business Group

  
  

Apr. 2008

  

Corporate Senior Vice President (Current)

General Manager of Production Business Group

  
  

Feb. 2011

  

General Manager of Global Procurement

Division (Current)

  
     

<Items of particular note with respect to the candidate for Director>

1. There are no special interests between the candidate and the Company.

2. The reasons for proposing him as a candidate for Director Mr. Kenichi Kanemaru has served in responsible positions in various production divisions in Japan and overseas and is playing a leading role in the reforms aiming at cost reduction and optimized production. We have judged that he is an appropriate person to be a Director of the Company, pursuing reforms of the corporate make-up. Hence, we propose him as a Director.

3. The number of the Company’s shares held by the candidate for Director is as of March 31, 2013.

  

 

- 6 -


Agenda 3: Election of two (2) Audit & Supervisory Board Members

As the tenure of office of Mr. Yuji Inoue, Audit & Supervisory Board Member, will expire at the conclusion of this Ordinary General Meeting of Shareholders and Mr. Tsukasa Yunoki, Audit & Supervisory Board Member, will retire from the office of Audit & Supervisory Board Member at the conclusion of this Ordinary General Meeting of Shareholders by resignation, the Company proposes the appointment of two (2) Audit & Supervisory Board Members at this meeting.

Since Messrs. Kunihito Minakawa and Kimitoshi Yabuki are not meant to be substitutes for the retiring Audit & Supervisory Board Members, the tenure of office of Messrs. Kunihito Minakawa and Kimitoshi Yabuki will expire at the conclusion of the Ordinary General Meeting of Shareholders for the last fiscal year expiring within a four year period after their appointment, in accordance with the Company’s Articles of Incorporation.

The Audit & Supervisory Board has given its consent to this agenda.

The candidates for Audit & Supervisory Board Members are as follows:

 

No.

 

Name

(Date of birth)

  

Brief personal profile and position at the Company

and significant concurrent positions

   Number of the
Company’s
shares held
 
1  

Kunihito Minakawa

(August 15, 1954)

   Apr. 1978    Joined the Company      3,000   
 

Newly Appointed

Candidate

   Jan. 2008   

General Manager of Business Strategy &

Planning Center of International Business Group

  
     Apr. 2009   

Associate Director

General Manager of Finance and

Accounting Division (Current)

  
     Apr. 2010    Corporate Vice President   
     Apr. 2011   

General Manager of CRGP (Corporate

Restructuring and Growth Project) Office

  
     Apr. 2012    Corporate Senior Vice President (Current)   
     June 2013   

Retire from General Manager of Finance

and Accounting Division (Scheduled) Retire from Corporate Senior Vice President (Scheduled)

  
       

<Items of particular note with respect to the candidate for Audit & Supervisory Board Member >

1. There are no special interests between the candidate and the Company.

2. The reasons for proposing him as a candidate for Audit & Supervisory Board Member Mr. Kunihito Minakawa, has been engaged in accounting and finance as well as overseas operations of the Company over the years, and is an expert of management systems. Given such experience, we have judged that he is an appropriate person to be an Audit & Supervisory Board Member of the Company. Hence, we propose him as an Audit & Supervisory Board Member.

3. The number of the Company’s shares held by the candidate for Audit & Supervisory Board Member is as of March 31, 2013.

  

 

- 7 -


No.

  

Name

(Date of birth)

   Brief personal profile and position at the Company
and significant concurrent positions
   Number of the
Company’s
shares held
 

2

  

Kimitoshi Yabuki

(August 22, 1956)

     Apr. 1987       Qualified as an attorney-at-law in Japan      0   
  

Candidate for

Outside Audit & Supervisory Board

Member

     Apr. 1987       Joined Nagashima & Ohno   
  

Newly Appointed

Candidate

     Sep. 1991      

Graduated from Columbia Law

School,NY (LL.M.)

Joined Covington & Burling in Washington

DC and Brussels

  
        May 1996       Joined Yabuki Law Offices (Current)   
        Mar. 2000       Audit & Supervisory Board Member of UPS Yamato Co., Ltd. (currently, UPS Japan Co., Ltd.)   
        June 2008       Outside Director of Eisai, Co., Ltd.   
        

<Items of particular note with respect to the candidate for Outside Audit & Supervisory Board Member>

1. There are no special interests between the candidate and the Company.

2. The reasons for proposing him as a candidate for Outside Audit & Supervisory Board Member Mr. Kimitoshi Yabuki, has global experience as a legal expert as well as years of experience in corporate management through activities related to corporate legal matters, and as an outside officer, and has high management oversight capabilities. We have judged that he is an appropriate person to be an Audit & Supervisory Board Member of the Company in order to accelerate our global corporate activities going forward. Hence, we propose him as an Audit & Supervisory Board Member.

3. With the expectation that Outside Audit & Supervisory Board Members can fulfill their roles associated with the position, the Company has executed contracts with Outside Audit & Supervisory Board Members to limit liability for damages as stipulated in Article 423, Paragraph 1 of the Corporate Law, to the higher of ¥5 million or the minimum liability limit amount stipulated in Article 425, Paragraph 1 of the Corporate Law. If approval is given for Mr. Kimitoshi Yabuki to be appointed as Outside Audit & Supervisory Board Member, the Company is scheduled to execute a similar liability limitation contract with him.

4. Mr. Kimitoshi Yabuki will become an Independent Officer as stipulated in Rule 436-2 of the Securities Listing Regulations of Tokyo Stock Exchange if approval is given for him to be appointed as Outside Audit & Supervisory Board Member.

5. The number of the Company’s shares held by the candidate for Outside Audit & Supervisory Board Member is as of March 31, 2013.

  

 

- 8 -


Agenda 4: Election of one (1) Substitute Audit & Supervisory Board Member

The Company proposes to appoint in advance one (1) substitute Outside Audit & Supervisory Board Member to fill in for Outside Audit & Supervisory Board Member Mr. Takao Yuhara, or Mr. Kimitoshi Yabuki who is scheduled to become Outside Audit & Supervisory Board Member if Agenda 3 is approved as originally proposed, for the purpose of ensuring continuity in audit operations in the event of contingency bringing down the number of serving Audit & Supervisory Board Members below the number required by law.

The above appointment may be nullified by a resolution of the Board of Directors with the consent of the Audit & Supervisory Board only before the candidate assumes office as Outside Audit & Supervisory Board Member.

The Audit & Supervisory Board has given its consent to this agenda.

The candidate for Substitute Outside Audit & Supervisory Board Member is as follows:

 

Name

(date of birth)

   Brief personal profile and position at the Company
and significant concurrent positions
   Number of the
Company’s
shares held
 

Kiyohisa Horie

(March 7, 1948)

     Apr. 1970      

Joined Horie Morita Audit Office (now : Meiji

Audit Corporation)

     0   

Candidate for Substitute

Outside Audit & Supervisory Board Member

      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)

  
     

Managing Partner of Meiji Audit Corporation

(Current)

  
     May 1998      

Vice-Chairman & Managing Partner of Meiji

Audit Corporation (Current)

  
     

<Items of particular note with respect to the candidates for Substitute Outside Audit & Supervisory Board Member >

1. There are no special interests between the candidate and the Company.

2. The reasons for proposing him as a candidate for Substitute Outside Audit & Supervisory Board Member With his insight and longstanding experience as a certified tax accountant and certified public accountant, we have judged that candidate Mr. Kiyohisa Horie is an appropriate person to be an Audit & Supervisory Board Member of the Company. Hence, we propose him as a Substitute Audit & Supervisory Board Member.

3. With the expectation that Outside Audit & Supervisory Board Members can fulfill their roles associated with the position, the Company has executed contracts with Outside Audit & Supervisory Board Members to limit liability for damages as stipulated in Article 423, Paragraph 1 of the Corporate Law, to the higher of ¥5 million or the minimum liability limit amount stipulated in Article 425, Paragraph 1 of the Corporate Law. If approval is given for this proposal and if Mr. Kiyohisa Horie assumes his office as Audit & Supervisory Board Member, the Company is scheduled to execute a similar liability limitation contract with him.

4. Mr. Kiyohisa Horie will become an Independent Officer as stipulated in Rule 436-2 of the Securities Listing Regulations of Tokyo Stock Exchange if approval is given for him to be appointed as Substitute Audit & Supervisory Board Member and also if he assumes his office as Audit & Supervisory Board Member.

5. The number of the Company’s shares held by the candidate for Substitute Outside Audit & Supervisory Board Member is as of March 31, 2013.

  

 

- 9 -


Agenda 5: Payment of bonuses to Directors

The Company proposes that bonuses amounting to ¥98.41 million be paid to the thirteen (13) Directors (excluding Outside Directors) who are at the office of Directors during the current fiscal year, based on the Company’s earnings results and other factors. The Company requests that the details such as specific amount to be paid to each Director, timing and manner of payment be left to the decision of the Board of Directors.

Notes:

 

1.

The number of recipients includes five (5) Directors (excluding Outside Directors) who retired during the fiscal year.

2.

Bonuses were not paid to directors in the previous fiscal year because net loss was recorded.

<Policy of Remuneration for Directors>

 

At the Company, executive remuneration is employed as an effective incentive to achieve a sustainable increase in corporate earnings for medium- to long-term, in the pursuit of increased shareholder value of Ricoh and the Ricoh Group. In addition, from the viewpoint of strengthening corporate governance, measures to secure objectivity, transparency, and validity are taken in setting up remuneration levels and determining individual remunerations, and the Company determines executive remuneration based on the following basic policies:

 

  1)

Remuneration must appropriately reflect roles, responsibilities, performance, etc. that Directors are expected to perform, as well as business results and shareholder value of the Company.

 

  2)

When remuneration levels are set up and individual remunerations are determined, objectivity, transparency and validity must be secured through proper external benchmarks and deliberation by the Nomination and Compensation Committee.

[Components and determination of remuneration]

 

1)

Basic remuneration

The amount of basic remuneration paid to Directors is determined based on their roles, importance of responsibilities, and stock price performance.

The basic remuneration for Directors consists of remuneration pertaining to management oversight, remuneration reflecting the importance of their individual roles and responsibilities, remuneration for the purpose of purchasing the Company’s stocks, and variable remuneration linked to stock price performance during the relevant fiscal year.

 

2)

Bonuses

The amount of bonuses paid to Directors is determined based on the achievement of key performance indicators such as sales, operating income, and ROA, which pertain to improvement of shareholder value and enhancement of the Company’s competitiveness. Proposed bonuses are brought before the Ordinary General Meeting of Shareholders every time for approval.

 

- 10 -


Reference Documents Attached to Notice of 113th Ordinary General Meeting of Shareholders

Business Report for 113th Business Term

(April 1, 2012 — March 31, 2013)

(The following is an unofficial English translation of the Reports for the 113th 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

Operating progress and results

 

 

Overview

Business Environment

The Japanese economy has shown signs of gradual recovery with the increase in demand relating to the recovery and restoration of the areas affected by the Great East Japan Earthquake. However, with the prolonged appreciation of the yen, along with the continued concerns of a global economic slowdown, the economic environment remained fairly stagnant throughout the fiscal year. Since the end of last year, the higher expectations arising from the economic recovery plans introduced by the new cabinet and the Bank of Japan’s monetary easing policy have helped to weaken the yen and increase the stock prices, but the overall economic outlook still remains unpredictable.

Outside of the domestic market, the U.S. economy is showing signs of a modest recovery, but the European economy remains stagnant under the prolonged European debt crisis, along with the slowdown in growth occurring in China and the rest of the emerging markets. These economic conditions have continuously affected the overseas sales of Ricoh.

The RICOH Way and RICOH Brand Benefits

The Ricoh Group sets The RICOH Way, which is based on our founding principles and Mission, Vision, and Values, as basis of our business activity. In The RICOH Way, Ricoh aims “to be the most trusted brand with irresistible appeal in the global market” and has as its mission “at the Ricoh Group, we are committed to providing excellence to improve the quality of living”.

With the RICOH Way in mind, Ricoh has been providing innovative products and services that embody the RICOH Brand Benefits of “Harmonize with the environment”, “Simplify your life and work”, and “Support knowledge management” to all customers who handle information. Also, Ricoh aims to earn greater trust by continuing to contribute to the improvement of customers’ productivity and knowledge creation in aiming to continue growing in the future.

Medium and Long Term Management Strategy

The business environment surrounding the Ricoh Group has drastically changed in the past several years and we are currently at a turning point for our core Imaging & Solutions business.

 

- 11 -


In developed countries, the demands for copiers and multifunction equipment have become stagnant. More information is processed in the office environment than ever before, but the increase in the information communicated is handled more through the Internet by devices such as smartphones and tablet PCs. This has increased the variations in the way we print. Furthermore, amid heightened cost consciousness since the world financial crisis, combined with the development of cloud computing, the values sought by customers are shifting towards an emphasis on “owning products” in addition to “using services”. It is becoming increasingly difficult to respond adequately to customer demands through product function and price alone.

The Ricoh Group has launched the 17th Mid-Term Management Plan that runs from April 2011 to March 2014, which defines “business creation and integration” and “establishment of highly efficient management” as its two basic strategies to adapt to these changes.

For “business creation and integration”, aiming for “regeneration”, we are implementing measures to reinforce the earning power through core businesses, to create new profit models in current core businesses and to accelerate development for new growth businesses.

With regard to the “establishment of highly efficient management”, we are reconstructing our corporate systems in order to build an organization that can maintain accelerated business growth while properly responding to any changes in the business environment. Also in order to improve resource efficiency, we are reviewing our business processes and our allocation of human resources. We are also conducting a full analysis of all business activities, and advancing structural reform.

The status of achievement for this fiscal year on our core strategies are as follows:

- Business Creation and Integration

In the Imaging & Solutions segment, we have introduced a full line-up of products that will contribute to the increase in productivity and reduction of total cost of ownership (TCO) for our customers.

With regards to our digital monochrome multifunction equipment, we have introduced the MP 9002/7502/6002/6002GP series. These products are the first in the office equipment industry to use electric furnace steel sheets that are made of 100% steel scrap in some of its parts, thus reducing the volume of new resources used.

Additionally, we have introduced a full line-up of reconditioned multifunction equipment, which are comprised of MP C4000RC SRF/MP C2800RC SRF for color printing and MP 7501RC/6001RC/5000RC/4000RC/3350RC/2550RC series for monochrome printing. These products are manufactured using mainly reusable parts and have contributed to a large reduction in the level of CO2 during the manufacturing process.

By introducing these new products that have achieved improved environmental performance and productivity, we were able to obtain high market share for multifunction equipment.

As for printers, we have introduced a complete new lineup of products, which are SP C831/C831M/ C830/C830M/C731/C731M/C730/C730M/C730L for color printers and SP 8300/8300M for monochrome printers. These products are equipped with a user friendly 4.3 inch full color LCD touch panel, which allows for improved visibility and operability. Furthermore, features such as printing function for mobile and other devices have been improved by connecting to a cloud computing environment.

 

- 12 -


In addition to this, we have also introduced our unique GELJET SG 7100 and the GELJET SG 3100SF. These compact models offers improved first print output, enhanced security features that will fit the needs of various industries and operations. Furthermore, these compact models can be used as a desktop machine in the office to achieve improved productivity at low-cost.

With regard to our other offerings, we have introduced six new projection systems (twelve models), including our desk edge / short throw projectors PJ WX3340N and PJ WX4240N. We also introduced the Interactive Whiteboard D5500 for offices and various other places, which allows users to write directly onto the display and facilitates smooth communication with remote regions. By offering solutions that take advantage of the outstanding performance of these products, we support the changing work styles of our customers, by speeding up the streamlining of collaborative work and the activation of the organization.

We expanded Managed Document Services (MDS)* and IT services that range from introduction of IT to providing solutions including security and business continuity, and supported customers in improving their productivity. Furthermore, by improving overall operations with the use of fewer resources, we have been able to achieve improved revenue growth in this market.

 

*

Managed Document Services (MDS)

A service which undertakes the outsourcing of customers’ document administration in order to realize cost reductions and improve productivity. This service visualizes and analyzes operations such as document creation, utilization, and storage, and proposes improvements that lead to solutions for challenges faced by our customers.

In the emerging markets, we continued to provide a strong lineup of products such as our A4 multifunction equipment along with streamlining our development and manufacturing functions to further accelerate reduction in our production costs. We have strengthened our sales channels mainly in Asia, and achieved high market share.

In production printing, we continued to press ahead with reinforcement of the design and development function through concentration of resources, as well as reorganizing and enhancing the sales service system, and strengthening the product lineup. In line with reinforcing the development of new solutions and service models linked to the “RICOH Pro series”, we invested in PTI Marketing Technologies, Inc., a printing-related software company in the United States.

With regards to new business development, we have expanded technological development and products in our industrial and consumer areas in order to provide added-value to our customers.

In the Industrial Products segment, we have continued our development of advanced devices, modules and materials based on our core optical and thermal technology. Under such development, we introduced a re-writable hybrid media that allows for images made chemically to appear or disappear through controlled application of heat. Furthermore, we have introduced a lineup of five Factory Automation (FA) cameras and fourteen lenses that can be used in manufacturing lines for inspection, pattern matching, and alignment. These products have contributed to the increased productivity and reduction of costs in our customers manufacturing facilities. With regards to our thermal media business, we are continuing to take steps to increase our presence in the global market, especially in the emerging market. In order to gain a foothold into this market, we have established a subsidiary in India.

 

- 13 -


As for the Consumer segment, we continue to strengthen our product lineup with the introduction of our digital compact interchangeable lens SLR camera the “PENTAX Q10” and our top of the line K series “PENTAX K-5 II” camera.

- Establish Highly Effective Management

In order to achieve stable performance and build a robust management structure for further growth under the severe economic environment, the Ricoh Group has implemented various initiatives to restructuring. This includes initiatives such as drastically reducing expenses, streamlining overlapping operations and shift of personnel to growth areas, as well as an exhaustive review of all operations. Furthermore, to enhance the global competitiveness of our engineering and manufacturing functions, we have reorganized part of our engineering and manufacturing resources relating to imaging products at production related companies, and some portion of those same resources of the Ricoh Group in Japan, and integrated them into Ricoh Technologies Co., Ltd. and Ricoh Industry Co., Ltd. on April 1, 2013.

Performance in the fiscal year under review

Net sales amounted to ¥1,924.4 billion, up 1.1% from the previous fiscal year, due to the impact of the shift to a weaker yen, and capturing demand in emerging markets including China. Gross profit increased by 2.1% year-on-year to ¥768.6 billion, due to a rise in sales and the effects of continuous cost reduction measures. The results of the Group’s united efforts for structural reform contributed to a drop in selling, general and administrative expenses, which declined 8.5% year-on-year to ¥705.1 billion, also reflecting the impact of impairment loss of goodwill and of long-lived assets posted in the previous fiscal year, as well as a decrease in structural reform cost. Consequently, operating income grew to ¥63.4 billion, a significant increase compared to the previous fiscal year, and net income attributable to Ricoh Company, Ltd. rose by ¥77.0 billion year-on-year to ¥32.4 billion.

 

LOGO

 

- 14 -


 

Consolidated sales by category (consolidated basis)

 

Category

   Sales (billions of yen)      Percentage of total (%)      Change (%)  

Imaging & Solutions (Note)

     1,685.3         87.5         0.9   

Office Imaging

     1,329.6         69.1         0.5   

Production Printing

     147.0         7.6         (1.0

Network System Solutions

     208.7         10.8         4.8   

Industrial Products (Note)

     93.0         4.8         (5.1

Other (Note)

     146.0         7.7         8.7   
  

 

 

    

 

 

    

 

 

 

Total

     1,924.4         100.0         1.1   
  

 

 

    

 

 

    

 

 

 

Note:

From this fiscal year, we have changed the method of summarizing sales by category.

The Imaging & Solutions segment has been changed from the previous two categories of Imaging Solutions and Network System Solutions to three categories, namely Office Imaging, Production Printing, and Network System Solutions. In addition, some products have been moved from the Other segment to the Network System Solution category and the Industrial Products segment.

Imaging & Solutions (Sales up 0.9% year on year to ¥1,685.3 billion)

The Imaging & Solutions segment consists of Office Imaging, Production Printing and Network System Solutions. The overall sales in this segment increased by 0.9% from the previous fiscal year to ¥1,685.3 billion.

 

 

LOGO

Office Imaging (Sales up 0.5% year on year to ¥1,329.6 billion)

Sales of Office Imaging category increased by 0.5% compared to the previous fiscal year to ¥1,329.6 billion.

The sales of color products increased mainly in multifunction equipment, and with the effect of yen weakening, the sales increased compared to the previous fiscal year.

 

 

LOGO

 

- 15 -


Production printing (Sales down 1.0% year on year to ¥147.0 billion)

Sales of Production Printing category decreased by 1.0% compared to the previous fiscal year to ¥147.0 billion. Sales of self-developed cut sheet printers increased, however, sales of products mainly such as those purchased from third party decreased.

 

 

LOGO

Network System solutions (Sales up 4.8% year on year to ¥208.7 billion)

Sales of Network System Solutions category increased by 4.8% compared to the previous fiscal year to ¥208.7 billion due primarily to the increase in sales of IT services, etc. mainly in overseas.

 

 

LOGO

Industrial Products (Sales down 5.1% year on year to ¥93.0 billion)

Sales in the Industrial Products segment decreased by 5.1% compared to the previous fiscal year, to ¥93.0 billion.

Sales of thermal media increased from the previous fiscal year, but the sales of semiconductors and electronic components decreased.

 

 

LOGO

Other (Sales up 8.7% year on year to ¥146.0 billion)

Sales in the Other segment increased by 8.7% compared to the previous fiscal year to ¥146.0 billion, due to effect of PENTAX RICOH IMAGING CO., LTD, which was acquired in the second half of the previous fiscal year.

 

 

LOGO

 

- 16 -


 

Consolidated sales by region (consolidated basis)

 

Region

   Sales (billions of yen)      Percentage of total (%)      Change (%)  

Japan

     870.3         45.2         (1.8

Overseas

     1,054.1         54.8         3.6   

The Americas

     496.6         25.8         5.9   

Europe, Middle East and Africa

     421.7         21.9         0.1   

Other

     135.7         7.1         6.9   
  

 

 

    

 

 

    

 

 

 

Total

     1,924.4         100.0         1.1   
  

 

 

    

 

 

    

 

 

 

Note:

From this fiscal year, we have changed the method of summarizing sales by region.

Middle East and Africa, which were included in Other region, have been included in Europe and changed to be presented as Europe, Middle East and Africa from the current fiscal year.

Japan (Sales down 1.8% year on year to ¥870.3 billion)

In the Japanese economy, with the prolonged appreciation of the yen, along with the continued concerns of a global economic slowdown, the economic environment remained fairly stagnant throughout the fiscal year. Since the end of last year, an upward trend such as weakening of the yen and increase of the stock prices has been seen, but the overall economic outlook still remains unpredictable. As a result, the sales in Japan decreased by 1.8% from the previous fiscal year to ¥870.3 billion.

The Americas (Sales up 5.9% year on year to ¥496.6 billion)

In the Americas, the economic situation remains unpredictable despite the gradual recovery in individual consumption and capital investment. As a result, with the contribution of weakening of the yen, overall sales increased by 5.9% compared to the previous fiscal year, to ¥496.6 billion.

Europe, Middle East and Africa (Sales up 0.1% year on year to ¥421.7 billion)

The economic situation remains uncertain due to the prolonged European debt crisis. The yen showed signs of weakness against the Euro around the end of the fiscal year, but throughout most part of the year, the yen remained strong against the Euro. As a result, the sales increased slightly by 0.1% compared to the previous fiscal year, to ¥421.7 billion.

Other (Sales up 6.9 % year on year to ¥135.7 billion)

The emerging markets including China and India are achieving strong growth, though there are signs of slowdown in growth among these countries and the rest of the emerging markets. We are strengthening the sales force mainly in the emerging markets, and as a result, overall sales in Other regions increased by 6.9% from the previous fiscal year, to ¥135.7 billion.

(2) Issues the Ricoh Group faces

The Ricoh Group has not only taken various steps to cope with the worldwide financial meltdown, the Thailand flooding, the catastrophic earthquake and tsunami in Japan and huge shift ICT technology, but has implemented various initiatives to build a strong and stable management system for growth. This coming fiscal year 2013 will be an important year for the Ricoh Group in developing a market for further growth. To achieve this growth, we have set forth and will implement the following four core action plans.

 

- 17 -


1. Thoroughly reinforce the earning power through core businesses

In regards to our core business in the Office Imaging segment, we will continue to win over competition and increase market share by improving the features of our products at competitive prices, along with providing quicker innovative solutions to our customers. Furthermore, by increasing the efficiency of our development, manufacturing and sales operations, we will be able to increase our profitability.

Additionally, in the emerging markets with continued growth, we will increase profit through expansion of sales channels along with increasing sales through the various IT services companies acquired in the past several years. Furthermore, products and services will be developed upon the features and prices demanded in the respective markets. In addition to China, India and others, we will continue to establish our presence in markets or countries in which we can expect strong growth.

As for our Production Printing business, we will continue to enhance our product lineup. we can expect an increase in revenue from the increased print volume achieved from the sale of these products. Furthermore, we will develop business fields for commercial printing.

2. Create new profit models in current core businesses

We will constantly look to provide solutions to a wider range of issues surrounding our customers to establish an additional growth model to our existing multi-function and printer business. We will further enhance our MDS and IT Services along with strengthening our solutions for enhanced communication such as our projection system, video conference system and our interactive whiteboard solution. Additionally, by providing improved connectivity of our multi-function products and printers to smart phones and tablet PCs, we can offer more innovative work style solutions to our customers.

3. Accelerate development for new growth businesses

In order for the Ricoh Group to take advantage of new business opportunities, we will continue to provide the market with innovative optical, image processing and environmental technology solutions. Especially in the area of optical systems in our Industrial Products segment, we will enhance our applied technology to develop and market new devices and modules. Furthermore, for our consumer segment, especially surrounding our digital SLR cameras, we will continue to strengthen our products and sales network to solidify our presence in this market.

Moreover, to maintain long-term growth, we will continue to improve and strengthen the process of searching and developing for profitable business opportunities in the future.

 

- 18 -


4. Improve resource efficiency

We will increase overall business efficiency to maximize the value of our products and services that can be generated through the resources injected. We will continue to place effort into establishing a corporate culture that will value employees in all areas (development, manufacturing, sales and headquarters, etc.) whom have a mindset for working to earn even greater trust and confidence from its customers as a reliable partner.

For corporations to be sustainable for the future, they must always contribute to the welfare of mankind, the development of society and the conservation of earth’s environment. For the Ricoh Group to continue to grow and to be admired by society, we will continue to increase corporate value in respect to the society, environment and the economy. As part of these efforts, in April 2012, the Ricoh Group introduced a new global brand tagline “imagine. change.” To express the concept that collective imagination can pave the way for change into the future.

With this new corporate message, the Ricoh Group will continue its concerted efforts to drive innovation to a broader extent than customers’ expectations, aiming to remain their most valued and trusted business partner.

 

- 19 -


(3) Status of plant and equipment investment and fund procurement

(i) Plant and equipment investment

In the fiscal period under review, the Ricoh Group invested a total of ¥86.5 billion (including an investment of ¥30.6 billion by the Company) in plant and equipment, mainly comprising the following.

 

(a)

Major equipment and facility expansions completed during the fiscal year:

 

   

Equipment-related supplies plant (Numazu Plant)

 

(b)

Major equipment and facility expansions in progress in the fiscal year:

 

   

Equipment-related supplies plant (Tohoku Ricoh)

 

   

Equipment-related supplies plant (RICOH ELETRONICS, INC.)

 

 

LOGO

(ii) Fund procurement

None applicable.

 

- 20 -


(4)    Status of assets and profit/loss

 

 

Transition of assets and profit/loss of the Ricoh Group

 

Items

   Fiscal year
ended
March 2010
     Fiscal year
ended
March 2011
     Fiscal year
ended
March 2012
    Fiscal year
ended
March 2013
 

Net sales (billions of yen)

     2,015.8         1,941.3         1,903.4        1,924.4   

Income (loss) before income taxes and equity in earnings of affiliates (billions of yen)

     57.0         44.1         (31.9     58.1   

Net income (loss) attributable to Ricoh Company, Ltd. (billions of yen)

     27.0         18.6         (44.5     32.4   

Net income (loss) per share attributable to Ricoh shareholders (yen)

     37.27         25.68         (61.42     44.78   

Total assets (billions of yen)

     2,377.9         2,255.5         2,289.3        2,360.6   

Total Ricoh shareholders’ equity (billions of yen)

     969.3         925.2         822.7        897.9   

Notes:

 

1.

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S.

 

2.

Net income (loss) per share attributable to Ricoh shareholders 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.

 

LOGO

 

- 21 -


 

Transition of assets and profit/loss of the Company

 

Items

   Fiscal year
ended
March 2010
     Fiscal year
ended
March 2011
     Fiscal year
ended
March 2012
    Fiscal year
ended
March 2013
 

Net sales (billions of yen)

     849.0         842.2         795.4        803.8   

Ordinary income (loss) (billions of yen)

     26.9         7.1         (7.4     18.6   

Net income (loss) (billions of yen)

     23.3         9.7         (128.6     15.8   

Net income (loss) per share (yen)

     32.12         13.39         (177.37     21.86   

Total assets (billions of yen)

     1,272.9         1,252.4         1,135.1        1,110.0   

Net assets (billions of yen)

     767.0         752.1         599.2        603.0   

Note:

Net income (loss) 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.

 

LOGO

 

- 22 -


(5) Status of major subsidiaries

 

 

Status of major subsidiaries (as of March 31, 2013)

 

Name

   Paid-in capital   Investment
ratio (%)
    

Principle business

Tohoku Ricoh Co., Ltd.
(Note 1)

   2,272 million JPY     100.0      

Manufacturing of office equipment and

related supplies

RICOH JAPAN Corporation

   2,517 million JPY     100.0       Sale of office equipment

Ricoh Technosystems Co., Ltd.

   2,128 million JPY     100.0      

Maintenance service and sale of office

equipment

Ricoh Leasing Company, Ltd.
(Note 2)

   7,896 million JPY     51.1       General leasing

RICOH ELECTRONICS, INC
(Note 2)

   27 million USD     100.0      

Manufacturing of office equipment and

related supplies

RICOH AMERICAS CORPORATION
(Note 2)

   1,286 million USD     100.0       Sale of office equipment

RICOH PRODUCTION PRINT SOLUTIONS, LLC (Note 2)

   (Note 3)     100.0       Sale of office equipment

RICOH EUROPE HOLDINGS PLC
(Note 4)

   1.9 million GBP     100.0      

Holding company of sales in the European

region

RICOH ASIA INDUSTRY LTD.

   180 million HKD     100.0       Sale of office equipment

Notes:

 

1.

On April 1, 2013, Tohoku Ricoh Co., Ltd. was integrated into Ricoh Industry Co., Ltd. through an absorption-type merger.

 

2.

The respective percentage of total investment ratio for Ricoh Leasing Company, Ltd., RICOH ELECTRONICS, INC., RICOH AMERICAS CORPORATION, and RICOH PRODUCTION PRINT SOLUTIONS, LLC include voting rights of those shares held by subsidiaries.

 

3.

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.

 

4.

RICOH EUROPE HOLDINGS PLC is a holding company which was established as business restructuring in Europe.

 

- 23 -


(6) Main business (as of March 31, 2013)

 

Imaging & Solutions

  

Office Imaging

  

Multifunctional products, copiers, printers, digital duplicators, facsimile machines, scanners, as well as related supplies, customer service, support and software, etc.

  

Production Printing

  

Cut sheet printer, continuous feed printer, related supplies, customer service, support and software, etc.

  

Network System Solutions

  

Personal computers, PC servers, network equipment, related customer service, support and software, etc.

Industrial Products

  

Thermal media, optical equipments, semiconductors and electronic components, etc.

Other

  

Digital cameras, etc.

(7) Principal offices and plants (as of March 31, 2013)

 

 

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.) (Note)

Shin-Yokohama Office (Kanagawa Pref.)

   Ricoh Printing Systems, Ltd. (Ibaraki Pref.) (Note)

Ricoh Technology Center (Kanagawa Pref.)

   Ricoh Elemex Corporation (Aichi Pref.)

Research and Development Center (Kanagawa Pref.)

   RICOH JAPAN Corporation (Tokyo)

Atsugi Plant (Kanagawa Pref.)

   Ricoh Technosystems Co., Ltd. (Tokyo)

Numazu Plant (Shizuoka Pref.)

   Ricoh Leasing Company, Ltd. (Tokyo)

Fukui Plant (Fukui Pref.)

  

Ikeda Plant (Osaka Pref.)

  

Yashiro Plant (Hyogo Pref.)

  

Note:

On April 1, 2013, Tohoku Ricoh Co., Ltd. and Ricoh Printing Systems, Ltd. were integrated into Ricoh Industry Co., Ltd. through an absorption-type merger.

 

 

Major overseas offices

 

Subsidiaries (location)

  

Subsidiaries (location)

RICOH AMERICAS CORPORATION (U.S.A.)

   RICOH ELECTRONICS, INC. (U.S.A.)

RICOH PRODUCTION PRINT SOLUTIONS, LLC (U.S.A.)

   RICOH USA INC. (U.S.A.)

RICOH INDUSTRIE FRANCE S.A.S. (France)

   RICOH UK PRODUCTS LTD. (U.K.)

RICOH EUROPE PLC (U.K.)

   RICOH ASIA INDUSTRY (SHENZHEN) LTD. (China)

RICOH CHINA CO., LTD. (China)

   SHANGHAI RICOH DIGITAL EQUIPMENT CO., LTD. (China)

RICOH ASIA PACIFIC PTE, LTD. (Singapore)

   RICOH MANUFACTURING (THAILAND), LTD. (Thailand)

 

- 24 -


(8) Status of employees (as of March 31, 2013)

(i) Employees of the Ricoh Group

 

Categories

   Number of employees  

Imaging & Solutions business

     96,741   

Industrial Products business

     3,247   

Other businesses

     6,257   

Common businesses in the Group

     1,186   

Total

     107,431   

 

 

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(ii) Employees of the Company

 

Categories

    

Number of employees

   9,710

Change from the end of the previous fiscal year

   384 (Decrease)

Average age

   41.6

Average length of service

   17.8 years

(9) Main creditors (as of March 31, 2013)

 

Creditors

   Amounts borrowed (million yen)  

Syndicated loans

     93,300   

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

     76,226   

Mizuho Corporate Bank, Ltd.

     48,470   

Note:

Syndicated loans are financed by the managing banks of the Bank of Tokyo-Mitsubishi UFJ, Ltd. and Mizuho Corporate Bank, Ltd.

 

- 25 -


2. Shareholders’ Equity (as of March 31, 2013)

 

(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:

     45,388   

(4) Major shareholders:

  

 

      The shareholders’ stake in the Company  

Name

  Thousands of shares     Percentage of ownership (%)  

The Master Trust Bank of Japan, Ltd. (Trust Account)

    79,058        10.90   

Japan Trustee Services Bank, Ltd. (Trust Account)

    57,891        7.98   

Nippon Life Insurance Company

    36,801        5.08   

Japan Trustee Services Bank, Ltd. (Trust Account 9)

    26,552        3.66   

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

    21,573        2.98   

SSBT OD05 OMNIBUS ACCOUNT-TREATY CLIENTS

    18,356        2.53   

NIPPONKOA Insurance Co., Ltd.

    18,198        2.51   

THE NEW TECHNOLOGY DEVELOPMENT FOUNDATION

    15,839        2.18   

The Ricoh Employee Shareholding Association

    12,624        1.74   

MELLON BANK, N.A. AS AGENT FOR ITS CLIENT MELLON OMNIBUS US PENSION

    9,795        1.35   

Notes:

 

1.

The number of treasury stocks (19,875 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 (0.14%) 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.

 

3.

The percentage of ownership is calculated after deducting treasury stock.

 

 

Breakdown of shareholders

 

LOGO

 

- 26 -


3. Status of Corporate Officers

(1) Directors and Audit & Supervisory Board Members (as of March 31, 2013)

 

Position

  

Name

  

Principal duty and significant concurrent positions

     

(as of March 31, 2013)

  

(Reference: as of April 1, 2013)

Representative Director:    Shiro Kondo    CEO (Chief Executive Officer)    Chairman of the Board
Representative Director:    Zenji Miura    CFO (Chief Financial Officer), Internal Management and Control, General Manager of Imaging System Group, General Manager of Americas Marketing Group    CEO
Director:    Hiroshi Kobayashi    CHO (Chief Human Resource Officer), Corporate Social Responsibility, Legal & Intellectual Property    (Same as on the left)
Director:    Shiro Sasaki    CMO (Chief Marketing Officer), General Manager of PP Business Group and Trade Affairs & Export/Import Administration Division, RICOH PRODUCTION PRINT SOLUTIONS LLC (Chairman and CEO)    (Same as on the left)
Director:    Nobuo Inaba    CIO (Chief Information Officer), President of Ricoh Institute of Sustainability and Business    (Same as on the left)
Director:    Yozo Matsuura    Corporate Environment, General Manager of MFP Business Group    Corporate Environment, General Manager of MFP Business Group, General Manager of Research and Development Group
Director:    Yoshinori Yamashita   

General Manager of Corporate

Planning Division

   Internal Management and Control, General Manager of Corporate Planning Division
Director:    Kunihiko Sato    Ricoh Japan Corporation (President and CEO), General Manager of Japan Marketing Group    (Same as on the left)
Director:    Mochio Umeda    MUSE Associates, LLC. (U.S.A.) (President)    (Same as on the left)
     

ASATSU-DK INC. (Outside

Director)

  
     

Pacifica Fund I.LP. (Managing

Director)

  
      MUSE ASSOCIATES INC. (President)   
Director:    Kunio Noji   

Komatsu Ltd. (President and

CEO)

   Komatsu Ltd. (Chairman of the Board)

Senior Audit & Supervisory

Board Member:

   Yuji Inoue    (Full-time)    (Same as on the left)

Audit & Supervisory Board

Member:

   Mitsuhiro Shinoda    (Full-time)    (Same as on the left)

Audit & Supervisory Board

Member:

   Takao Yuhara    —      —  

Audit & Supervisory Board

Member:

   Tsukasa Yunoki   

Attorney-at-law

HIROSE ELECTRIC CO., LTD. (Outside Audit & Supervisory Board Member)

   (Same as on the left)

 

- 27 -


Notes:

 

1.

Directors Mochio Umeda and Kunio Noji are Outside Directors stipulated in Article 2-15 of the Corporate Law.

 

2.

Audit & Supervisory Board Members Takao Yuhara and Tsukasa Yunoki are Outside Audit & Supervisory Board Members stipulated in Article 2-16 of the Corporate Law.

 

3.

Serving at the Company’s accounting and finance sector for many years, Senior Audit & Supervisory Board Member Yuji Inoue has considerable knowledge about finance and accounting.

 

4.

Serving at the Company’s corporate planning and internal management and control sectors for many years, Audit & Supervisory Board Member Mitsuhiro Shinoda has considerable knowledge about finance and accounting.

 

5.

Audit & Supervisory Board Member Takao Yuhara served as Chief Financial Officer of SONY CORPORATION, etc. and has considerable knowledge about finance and accounting.

 

6.

Director Kunio Noji, Audit & Supervisory Board Members Takao Yuhara and Tsukasa Yunoki are Independent Directors / Audit & Supervisory Board Members stipulated in Rule 436-2 of the Securities Listing Regulations of Tokyo Stock Exchange.

 

7.

Director Mochio Umeda concurrently serves as president of MUSE Associates, LLC. (U.S.A.) and MUSE Associates Co., Ltd., which have business relations with the Company on the basis of a consignment contract, albeit involving transactions amount less than 0.01% of the Company’s consolidated selling, general and administrative expenses, posing no material impact. There is no special conflict of interests between the Company and each of companies above in which other Outside Directors and Audit & Supervisory Board Members have significant positions.

 

8.

As of June 26, 2012, Directors Takashi Nakamura, Kazunori Azuma, and Yoshimasa Matsuura retired as Director.

 

9.

Directors who resigned during the fiscal year are as follows.

 

Position as of the

resignation

  

Name

  

Principal duty and significant concurrent positions

as of the resignation

Director:

  

Kazuo Togashi

  

—  

Director:

  

Eiji Hosoya

  

Resona Holdings Inc. (Chairman and Executive Officer)

Resona Bank, Ltd. (Chairman)

Mitsui Fudosan Co., Ltd. (Outside Director)

Director:

  

Masamitsu Sakurai

  

Chairman of the Board

 

- 28 -


(2) Total remuneration, etc. paid to Directors and Audit & Supervisory Board Members

 

Category

   Number of recipients     Total remuneration, etc.
(million yen)
 

Directors

     16        572   

(Outside Directors)

     (3     (26

Audit & Supervisory Board Members

     4        76   
(Outside Audit & Supervisory Board Members)      (2     (14
  

 

 

   

 

 

 

Total

     20        648   
  

 

 

   

 

 

 

Notes:

 

1.

It was decided that aggregate basic remuneration of Directors should not exceed ¥46 million per month, according to the resolution of the 107th Ordinary General Meeting of Shareholders held on June 27, 2007. It was decided that aggregate basic remuneration of Audit & Supervisory Board Members should not exceed ¥9 million per month, according to the resolution of the 84th Ordinary General Meeting of Shareholders held on June 29, 1984.

 

2.

The remuneration, etc. paid to Directors excludes employee wages for Directors who are also employees.

 

3.

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 113th Ordinary General Meeting of Shareholders to be held on June 21, 2013, amounting to ¥98 million.

 

4.

The above includes five Directors who have retired and resigned during the fiscal year.

 

5.

In addition to the above, based on the resolution “Payment of retirement allowances for Directors and Audit & Supervisory Board Members following the abolishment of retirement allowance system” of the 107th Ordinary General Meeting of Shareholders held on June 27, 2007, the Company paid ¥173 million of retirement allowance to one Director who has resigned during the fiscal year.

(3) Outside Directors and Audit & Supervisory Board Members

(i) Signifi c ant concur r ent jobs Outside Directors a n d Audit & Supervi s ory Board Members are engaged in at other c o mpanies

 

Name

    

Significant concurrent positions

Outside Director

Mochio Umeda

    

MUSE Associates, LLC. (U.S.A.) (President)

ASATSU-DK INC. (Outside Director)

Pacifica Fund I.LP. (Managing Director)

MUSE Associates Co., Ltd. (President)

Outside Director

Kunio Noji

    

Komatsu Ltd. (President and CEO)

Outside Audit & Supervisory Board Member

Takao Yuhara

    

—  

Outside Audit & Supervisory Board Member

Tsukasa Yunoki

    

Attorney-at-law

HIROSE ELECTRIC CO., LTD. (Outside Audit & Supervisory Board Member)

 

- 29 -


(ii) Major activities by Outside Directors and Audit & Supervisory Board Members

 

Name

    

Main activities

Outside Director

Mochio Umeda

    

Participated in all of the 12 Board of Directors meetings (100% attendance rate)

held during the fiscal year under review and proactively made statements, mainly from his perspective based on his advanced knowledge in the IT field and his

experience in global business.

Outside Director

Kunio Noji

    

Participated in 8 of the 10 Board of Directors meetings (80% attendance rate) held

during the fiscal year under review after being appointed as Outside Director, and proactively made statements, mainly from his expert perspective based on his outstanding record and abundant experience as a management member at Komatsu Ltd., which operates on a global scale.

Outside Audit & Supervisory Board Member

Takao Yuhara

    

Participated in all of the 12 Board of Directors meetings (100% attendance rate) and

all of the 9 Audit & Supervisory Board meetings (100% attendance rate), held during the fiscal year under review, and made statements, whenever necessary, from his wealth of experience as financial officer of SONY CORPORATION, etc.

Outside Audit & Supervisory Board Member

Tsukasa Yunoki

    

Participated in 7 of the 12 Board of Directors meetings (58% attendance rate) and 5

of the 9 Audit & Supervisory Board meetings (55% attendance rate), held during the fiscal year under review, and made statements, whenever necessary, from his

various perspectives based on the insight he has cultivated as a lawyer.

(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 Audit & Supervisory Board Members.

The outline of liability limitation contracts, which the Company concluded with Outside Directors and Audit & Supervisory Board Members 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 ¥10.00 million or a minimum liability amount stipulated in Article 425, Item 1 of the Corporate Law.

(b) Liability limitation contracts with Outside Audit & Supervisory Board Members

Under such contracts, the maximum liability of Outside Audit & Supervisory Board Members shall be the higher of either of ¥5.00 million or a minimum liability amount stipulated in Article 425, Item 1 of the Corporate Law.

 

- 30 -


4. Accounting auditors

(1) Name: KPMG AZSA LLC

(2) Remuneration, etc.:

 

     Amount to be paid  

Remuneration, etc. to be paid to the accounting auditor by the Company

   ¥ 345 million   

Total sum of remuneration, etc. to be paid to the accounting auditor by the Company and its subsidiaries

   ¥ 507 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 5 other subsidiaries are audited by KPMG.

(3) Non-audit work

The Company requested the accounting auditor to perform work outside the scope of service stipulated under Article 2, Paragraph 1 of the Certified Public Accountants Act (non-audit work), including the provision of information on the implementation of International Accounting Standards, and duly paid consideration for such service.

(4) Policy regarding decision to dismiss or not reappoint the accounting auditor

The Audit & Supervisory Board, 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 Audit & Supervisory Board or as requested by the Audit & Supervisory Board.

 

- 31 -


5. 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. The resolutions will be reviewed regularly on an ongoing basis in response to changes in the business environment.

Internal Control System Basic Policy

The RICOH Way, which comprises our founding principles and Management Philosophy (Mission Statement, Vision Statement and Values Statement), is the foundation of the Ricoh Group’s management policy, strategy and internal control system.

Inspired by the values incorporated in the RICOH Way, we are working to establish and implement an internal control system aimed at strengthening competitiveness and continuously improving the system while ensuring transparency based on corporate ethics and legal compliance.

 

(1)

System to ensure the efficient implementation of Directors’ duties and compliance with laws and Articles of Incorporation

Based on the principle of autonomous corporate governance, the Company promotes a corporate culture that values both a sense of duty to meet the various expectations of stakeholders and high ethics suited to good social conscience. At the same time, the Company strives to create a sense of alertness in management and business execution, and further enhance the quality and speediness of such functions. To this end, the Company will adopt the following management structure.

 

(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 proposals 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, speeds 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 specific criteria. The GMC operates so as to accelerate deliberation and decision-making from the perspective of the optimum management of the entire Group, concerning the most appropriate strategies for direction of each business division and the entire Group, within the powers 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 verifies the process of disclosure.

 

- 32 -


(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 Audit & Supervisory Board Members.

 

(3)

Regulations and other structures regarding risk management for losses

 

(i)

The occurrence of losses shall be proactively prevented based on risk management regulations.

 

(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 has been created to thoroughly cover all aspects globally.

 

(4)

Systems to ensure appropriate compliance with laws, and Articles of Incorporation concerning the performance of employee duties

 

(i)

In order to thoroughly implement the “Ricoh Group Corporate Social Responsibility (CSR) Charter” which sets forth the principles of corporate behavior including compliance, and the “Ricoh Group Code of Conduct” which articulates 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 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 Instruments and Exchange Law and other relevant laws and regulations.

 

(iii)

To ensure appropriate internal auditing, an Internal Management and Control Division 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. 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 convene regularly to deliberate and decide on relevant matters.

 

- 33 -


(5)

Systems to ensure correct business standards at Ricoh and its affiliates

Ricoh and each affiliate in the Ricoh Group shall devise a system that ensures the adherence to correct business standards to improve business performance and enhance the prosperity of each Group company, while respecting each other’s independence, as follows:

 

(i)

The Company’s Board of Directors and the “Group Management Committee” (GMC) make decisions and perform management oversight for the Ricoh Group as a whole. To ensure the efficacy of such efforts, they establish management regulations concerning affiliate companies, and set up relevant administrative organizations in order to manage the Group.

 

(ii)

The “Ricoh Group Standard” (RGS) represents a set of common rules to be followed by the entire Group.

 

(6)

Systems established to ensure the effective performance of auditing responsibilities by Audit & Supervisory Board Members

 

1)

Matters regarding employees whom Audit & Supervisory Board Members request to assist them in the performance of their duties

 

(i)

The Company shall establish an Audit & Supervisory Board office, where exclusively assigned employees assist Audit & Supervisory Board Members in performing their duties.

 

(ii)

The above employees shall assist Audit & Supervisory Board Members in performing their duties while taking direction from them and shall not be subject to orders given by Directors. In addition, personal assessments regarding said employees shall be made by full-time Audit & Supervisory Board Members. Furthermore, personnel changes regarding said employees shall be made only after gaining agreement of full-time Audit & Supervisory Board Members.

 

2)

Systems related to reporting to Audit & Supervisory Board Members

 

(i)

Directors or employees shall promptly report to Audit & Supervisory Board Members concerning material violations of laws and the Articles of Incorporation at Ricoh and each affiliate in the Ricoh Group, as well as matters concerning wrongful acts or the possibility of significant damage to the company at the time of their discovery, in accordance with the law and internal rules concerning internal reporting.

 

(ii)

Directors and employees shall cooperate when they are requested to report matters concerning operations required for auditing by Audit & Supervisory Board Members.

 

(iii)

Directors shall provide Audit & Supervisory Board Members with minutes and materials of important meetings, as well as important resolution documents for their review.

 

3)

Systems established to ensure effective auditing by Audit & Supervisory Board Members

 

    

Directors and employees shall cooperate in facilitating the implementation of the following items by Audit & Supervisory Board Members.

 

(i)

Enable Audit & Supervisory Board Members to attend important meetings such as The Group Management Committee (GMC) and regularly exchange opinions with Representative Directors.

 

(ii)

Enable Audit & Supervisory Board Members to conduct effective auditing through the tripartite sharing of information and issues by periodic meetings, etc. based on the understanding that mutual cooperation with the Independent Auditor and Internal Management and Control Division is important.

 

- 34 -


The Company takes an uncompromising attitude toward antisocial activities and any organizations engaged therein in an effort to eradicate any antisocial activities and will not have any relationship with antisocial entities. This is stipulated in the “Ricoh Group Code of Conduct”, which stipulates correct behaviors for all corporate officers and employees of the Group.

Also, the Company has established an internal hotline and has been working closely with outside agencies, such as the police, and relevant organizations as well as making efforts to build trust with such organizations. In the future also, the Company will continue to strengthen its internal system so as to eradicate any antisocial

activities or relationships with antisocial entities.

 

LOGO

 

- 35 -


Consolidated Balance Sheets (as of March 31, 2013)

 

     Millions of yen  
     As of March 31,  
     2013     2012  

ASSETS

    

Current Assets:

     1,126,219        1,106,506   

Cash and cash equivalents

     117,051        156,210   

Time deposits

     3,280        2,461   

Trade receivables:

     509,581        467,214   

Notes

     36,772        43,921   

Accounts

     488,233        439,673   

Less-Allowance for doubtful receivables

     (15,424     (16,380

Current maturities of long-term finance receivables, net

     235,889        219,716   

Inventories:

     195,367        195,009   

Finished goods

     101,568        101,165   

Work in process and raw materials

     93,799        93,844   

Deferred income taxes and other

     65,051        65,896   

Fixed Assets:

     1,234,478        1,182,852   

Property, plant and equipment:

     290,875        268,527   

Land

     45,809        45,893   

Buildings and structures

     271,272        265,843   

Machinery and equipment

     701,590        659,503   

Construction in progress

     17,891        9,576   

Less-Accumulated depreciation

     (745,687     (712,288

Investment and other assets:

     943,603        914,325   

Long-term finance receivables, net

     466,608        468,004   

Investment securities

     54,102        45,470   

Investment in and advances to affiliates

     1,026        444   

Goodwill

     221,217        195,251   

Other intangible assets

     107,702        112,914   

Lease deposits and other

     92,948        92,242   
  

 

 

   

 

 

 

Total Assets

     2,360,697        2,289,358   
  

 

 

   

 

 

 

 

- 36 -


Consolidated Balance Sheets (as of March 31, 2013)

 

     Millions of yen  
     As of March 31,  
     2013     2012  

LIABILITIES AND EQUITY

    

Current Liabilities:

     700,367        673,024   

Short-term borrowings

     65,219        111,272   

Current maturities of long-term indebtedness

     161,180        105,160   

Trade payables:

     256,538        252,209   

Notes

     15,197        11,553   

Accounts

     241,341        240,656   

Accrued income taxes and other

     12,091        13,448   

Accrued expenses and other

     205,339        190,935   

Long-term Liabilities:

     701,672        737,316   

Long-term indebtedness

     476,381        525,435   

Accrued pension and severance costs

     164,289        164,757   

Deferred income taxes and other

     61,002        47,124   

Total Liabilities

     1,402,039        1,410,340   

Equity:

    

Ricoh Company, Ltd. shareholders’ equity:

     897,996        822,704   

Common stock

     135,364        135,364   

Additional paid-in capital

     186,083        186,083   

Retained earnings

     759,783        742,549   

Accumulated other comprehensive income (loss)

     (146,088     (204,175

Treasury stock at cost

     (37,146     (37,117

Non-controlling interests

     60,662        56,314   

Total Equity

     958,658        879,018   
  

 

 

   

 

 

 

Total Liabilities and Equity

     2,360,697        2,289,358   
  

 

 

   

 

 

 

 

- 37 -


Consolidated Statements of Operations (for the year ended March 31, 2013)

 

     Millions of yen  
     For the year ended March 31,  
           2013                 2012        

Net sales

     1,924,497        1,903,477   

Cost of sales

     1,155,896        1,150,855   

Gross profit

     768,601        752,622   

Selling, general and administrative expenses

     705,167        743,199   

Loss on impairment of goodwill

            27,491   

Operating income (loss)

     63,434        (18,068

Other income (expenses)

     (5,261     (13,869

Interest and dividend income

     3,048        3,129   

Interest expense

     (7,377     (6,979

Loss on valuation of securities

     (332     (5,012

Foreign currency exchange loss, net

     (121     (4,355

Others, net

     (479     (652

Income (loss) before income taxes and equity in earnings of affiliates

     58,173        (31,937

Provision for income taxes:

     20,838        8,223   

Current

     21,079        32,309   

Deferred

     (241     (24,086

Equity in earnings of affiliates

     31        39   

Consolidated net income (loss)

     37,366        (40,121

Net income attributable to non-controlling interest

     4,899        4,439   
  

 

 

   

 

 

 

Net income (loss) attributable to Ricoh Company, Ltd.

     32,467        (44,560
  

 

 

   

 

 

 

 

- 38 -


Consolidated Statement of Changes in Equity

(for the year ended March 31, 2013)

 

    (Unit: millions of yen)  
    Common
stock
    Additional
paid-in
capital
    Retained
earnings
    Accumulated
other
comprehensive
income (loss)
    Treasury
stock
    Total
Shareholders’
Investment
    Non-
controlling
interests
    Total equity  

Beginning balance

    135,364        186,083        742,549        (204,175     (37,117     822,704        56,314        879,018   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

               

Consolidated net income

        32,467            32,467        4,899        37,366   

Net, Unrealized gains and losses on securities

          4,984          4,984        49        5,033   

Pension liability adjustments

          3,312          3,312        95        3,407   

Net, Unrealized gains and losses on derivatives

          292          292        131        423   

Foreign currency translation adjustments

          49,499          49,499        (129     49,370   

Total comprehensive income

              90,554        5,045        95,599   

Net changes in treasury stock

            (29     (29       (29

Loss on disposal of treasury stock

        (7         (7       (7

Dividends declared and approved to Ricoh Company, Ltd. shareholders

        (15,226         (15,226       (15,226

Dividends paid to non-controlling interests

                (697     (697
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance

    135,364        186,083        759,783        (146,088     (37,146     897,996        60,662        958,658   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

- 39 -


Consolidated Statements of Cash Flows (Unaudited)

 

     Millions of yen  
     For the year ended March 31,  
         2013             2012      

1. Cash flows from operating activities

    

Consolidated net income (loss)

     37,366        (40,121

Adjustments to reconcile net income (loss) to net cash provided by operating activities —

    

Depreciation and amortization

     85,905        91,137   

Equity in (earnings) losses of affiliates, net of dividends received

     (31     (39

Deferred income taxes

     (241     (24,086

Loss on impairment of long-lived assets

     1,379        10,070   

Loss on impairment of securities

     302        5,012   

Loss on impairment of goodwill

            27,491   

Pension and severance costs, less payments

     (5,973     (5,386

Changes in assets and liabilities —

    

Decrease (increase) in trade receivables

     (16,292     (20,393

Decrease (increase) in inventories

     14,010        (17,126

Decrease (increase) in finance receivables

     4,725        (25,667

Increase (decrease) in trade payables

     781        (5,096

Increase (decrease) in accrued income taxes and accrued expenses and other

     (2,616     (5,623

Other, net

     5,211        21,033   

Net cash provided by operating activities

     124,526        11,206   

2. Cash flows from investing activities

    

Proceeds from sales of property, plant and equipment

     1,712        1,532   

Expenditures for tangible fixed assets

     (86,569     (73,271

Expenditures for intangible fixed assets

     (12,226     (14,504

Payments for purchases of available-for-sale securities

     (93     (93

Proceeds from sales of available-for-sale securities

     208        68   

(Increase) decrease in time deposits

     (374     (385

Purchase of business, net of cash acquired

     (2,774     (14,816

Other, net

     (6,351     (10,974

Net cash used in investing activities

     (106,467     (112,443

 

- 40 -


     Millions of yen  
     For the year ended March 31,  
         2013             2012      

3. Cash flows from financing activities

    

Net proceeds (repayments) of debt with original maturities of three months or less

     (59,046     68,948   

Proceeds from debt with original maturities of more than three months

     153,361        148,403   

Repayments of debt with original maturities of more than three months

     (162,677     (82,533

Proceeds from issuance of long-term debt securities

     20,000          

Repayment of long-term debt securities

            (22,444

Dividend paid

     (15,226     (23,942

Payment for purchase of treasury stock

     (39     (23

Other, net

     (694     (586

Net cash provided by (used in) financing activities

     (64,321     87,823   

4. Effect of exchange rate changes on cash and cash equivalents

     7,103        (2,597

5. Net decrease in cash and cash equivalents

     (39,159     (16,011

6. Cash and cash equivalents at beginning of year

     156,210        172,221   

7. Cash and cash equivalents at end of year

     117,051        156,210   

 

- 41 -


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

The number of consolidated subsidiaries is 211 and the number of companies to which the equity method is applied is 7 in the fiscal year under review.

In addition to the above, the Company added variable interest entities to its scope of consolidation from this fiscal year.

Significant Accounting Policies

1. Basis for Preparing Consolidated Financial Statements

The consolidated financial statements including consolidated balance sheets and consolidated statements of operations has been prepared on the basis of accounting principles generally accepted in the United States (“U.S. GAAP”), in compliance with Article 120(2), Paragraph 1 of the Corporate Calculation Regulations. However, in compliance with the second sentence of the paragraph, certain disclosure that is required on the basis of U.S. GAAP is omitted.

2. Accounting Policy for Securities

Accounting standards for securities conform to the provisions of the Financial Accounting Standards Board (FASB), Accounting Standards Codification TM (ASC) 320, “Investments - Debt and Equity Securities”. Ricoh’s investments in debt and marketable equity securities are mainly classified as available-for-sale securities. Available-for-sale securities are reported at fair value with unrealized gains and losses, net of related taxes, 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. Depreciation method for Tangible fixed Assets:

Tangible fixed assets are depreciated over the estimated useful life. Most of the foreign subsidiaries have adopted the straight-line method for computing depreciation.

Previously, the Company and its domestic consolidated subsidiaries principally had used the declining-balance method; however, the depreciation methods were reconsidered as the structural reforms including a review of consolidation of production bases were implemented following the changes in business environment. The Company deemed the straight-line method will more accurately reflect the usage pattern of our assets, since the expected usage pattern for future economic benefit is projected to level off further in the wake of changes in our asset portfolio triggered by factors such as the recent increase in capital investment relating to new manufacturing technologies. As a result, the Company and its domestic consolidated subsidiaries changed their depreciation method for tangible fixed assets to straight-line method from April 1, 2012.

This change is to be recognized for the years to come as a change in accounting estimates under ASC 250 “Accounting Changes and Error Corrections”. The change has no material impact on the consolidated financial statements for fiscal year ended March 31, 2013.

 

- 42 -


5. Depreciation method for 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 generally 3 to 10 years in accordance with ASC 350, “Goodwill and Other Intangible Assets”.

6. Goodwill and Other Intangible Fixed Assets:

Goodwill and intangible fixed assets that have indefinite useful lives are not amortized based on ASC 350, “Goodwill and Other Intangible Assets”. The Company conducts annual tests for impairment based on the same ASC. Other intangible fixed assets that have definite useful lives are depreciated by using the straight-line method.

7. Basis for Provision of Reserves

(1) Allowance for doubtful receivables:

Ricoh records allowances for doubtful receivables that are based upon historical experience and specific customer collection issues. The estimated amount of probable credit losses in its existing receivables is determined from write-off history adjusted to reflect current economic conditions and specific allowances for receivables including nonperforming leases, impaired loans or other accounts for which Ricoh has concluded it will be unable to collect all amounts due according to original terms of the lease or loan agreement.

(2) Reserve for retirement allowances:

The measurement of pension costs and liabilities is determined in accordance with ASC 715, “Retirement Benefits”. 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 are recognized in the consolidated balance sheets, and the corresponding adjustments, after tax effects are considered, are posted as other accumulated comprehensive income (loss). Actuarial net loss is amortized by straight-line amortization over the average remaining service period of active employees and included in 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.

 

- 43 -


8. The consumption tax and the local consumption tax are excluded from profits and losses.

Notes to Consolidated Balance Sheets, etc.

 

1.

Allowance for doubtful receivables related to current maturities of long-term finance receivables, net and long-term finance receivables:

 

   ¥ 10,249 million   

(1) Current maturities of long-term finance receivables, net:

   ¥ 3,865 million   

(2) Long-term finance receivables:

   ¥ 6,384 million   

 

2.

Accumulated other comprehensive income (loss) includes accumulated foreign currency translation adjustments, unrealized holding gains (losses) on available-for-sale securities, unrealized gain (loss) on derivative instruments, and pension liability adjustment.

 

3.

Pledged assets and liabilities:

 

(1) Pledged assets:

  

Property, plant and equipment:

   ¥ 84 million   

Long-term finance receivables, net:

   ¥ 230 million   

(2) Pledged liabilities

   ¥ 222 million   

 

4.

Matters related to transfers of financial assets

Subsidiaries of the Company conduct the transfer of long-term finance receivables, net to SPE and others. The transfer that does not satisfy requirements for being treated as the sale of financial assets is accounted for as secured borrowing.

With respect to the aforementioned accounting treatment, the consolidated balance sheets include the following assets and liabilities:

 

Current maturities of long-term finance receivables, net:

   ¥ 13,782 million   

Long-term finance receivables, net:

   ¥ 30,017 million   

Current maturities of long-term indebtedness (secured borrowings):

   ¥ 11,904 million   

Long-term indebtedness (secured borrowings):

   ¥ 26,199 million   

5. Guarantee obligation including employees’ housing loans:

   ¥ 8 million   

Notes to Consolidated Statements of Operations

Impairment of long-lived assets

The Company recorded ¥1,379 million of impairment loss for the fiscal year ended March 31, 2013. The impairment loss is included in cost of sales, and selling, general and administrative expenses in the consolidated statement of operations.

The major loss is related to some of the idle assets (land, buildings, etc.) such as business offices, at ¥903 million. As recovery of investment becomes unlikely, we have reduced such value down to recoverable value based on real estate appraisal, etc. and posted as impairment loss.

 

- 44 -


Notes to Consolidated Statement of Changes in Equity

 

 

1.

 

Details and total number of shares outstanding as of the end of the fiscal year

  

Common stock:

   744,912,078 shares

2.

 

Number of treasury stock as of the end of the fiscal year

  

Common stock:

   19,875,662 shares

3.

 

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: ¥16.50; total amount of dividend: ¥11,963 million; base date: March 31, 2013) for the 113th Ordinary General Meeting of Shareholders to be held on June 21, 2013.

Notes to Financial Instruments

 

1.

Matters concerning the state of financial instruments

Risk management policy

Ricoh enters into various derivative financial instrument contracts in the normal course of business in connection with the management of its assets and liabilities. Ricoh uses derivative instruments to reduce risk and protect market value of assets and liabilities in conformity with Ricoh’s policy. Ricoh does not use derivative financial instruments for trading or speculative purposes, nor is it a party to leveraged derivatives.

All derivative instruments are exposed to credit risk arising from the inability of counterparties to meet the terms of the derivative contracts. However, Ricoh does not expect any counterparties to fail to meet their obligations because these counterparties are financial institutions with satisfactory credit ratings. Ricoh utilizes a number of counterparties to minimize the concentration of credit risk.

Foreign Exchange Risk Management

Ricoh conducts business on a global basis and holds assets and liabilities denominated in foreign currencies. Ricoh enters into foreign exchange contracts and foreign currency options to hedge against the potentially adverse impacts of foreign currency fluctuations on those assets and liabilities denominated in foreign currencies.

Interest Rate Risk Management

Ricoh enters into interest rate swap agreements (including interest rate and currency swap agreements) to hedge against the potential adverse impacts of changes in fair value or cash flow fluctuations on interest of its outstanding debt.

 

- 45 -


2.

Matters concerning fair value of financial instruments

 

  (1)

Cash and cash equivalents, Time deposits, Trade receivables, Trade payables, Short-term borrowings, Current maturities of long-term indebtedness, and Accrued expenses

The carrying amounts approximate fair value because of the short maturities of these instruments.

 

  (2)

Investment securities

The fair value of the investment securities is principally based on quoted market price.

As a non-marketable security has no published market price and each security has distinctive attributes, the estimation of fair value could not be conducted without entailing considerable cost.

The book value of non-marketable securities as of March 31, 2013 was ¥1,783 million.

Investment securities whose fair values are recognized to be extremely difficult to grasp, are not included in the following table.

 

  (3)

Installment loans

The fair value of installment loans is based on the present value of future cash flows using the current interest rate for similar instruments of comparable maturity.

 

  (4)

Long-term indebtedness

The fair value of each of the long-term indebtedness instruments is based on the present value of future cash flows associated with each instrument discounted using the current borrowing rate for similar instruments of comparable maturity.

 

  (5)

Interest rate swap (including interest rate and currency swap)

The fair value of interest rate swap agreements is calculated on the basis of estimates obtained from financial institutions and appropriate valuation methods based on available information.

 

  (6)

Foreign currency contracts

The fair value of foreign currency contracts is calculated on the basis of estimates obtained from financial institutions and appropriate valuation methods based on available information.

 

  (7)

Foreign currency options

The fair value of foreign currency options is calculated on the basis of estimates obtained from financial institutions and appropriate valuation methods based on available information.

 

- 46 -


The consolidated balance sheet amounts and fair values of financial instruments as of March 31, 2013, are as follows:

(Unit: millions of yen)

 

     Balance sheet amount     Estimated fair value  

Investment securities

     52,319        52,319   

Installment loans

     89,657        90,655   

Long-term indebtedness

     476,381        475,018   

Interest rate swap agreements, net

     (1,404     (1,404

Foreign currency contracts, net

     (19,917     (19,917

Foreign currency options, net

     84        84   

 

*

Assumptions for estimated fair value

Fair value estimates are made at a specific point in time, based on available market information and information about respective financial instruments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment. Therefore, the estimated fair value may be significantly influenced by changes in those assumptions.

Notes to Per-share Information

 

1. Ricoh Company, Ltd. shareholders’ equity per share:

   ¥ 1,238.55   

2. Basic net income attributable to Ricoh Company, Ltd. shareholders per share:

   ¥ 44.78   

 

- 47 -


Non-consolidated Balance Sheets (as of March 31, 2013)

 

     Millions of yen  
     As of March 31,  
     2013     2012  

ASSETS

    

Current Assets:

     393,858        466,274   

Cash on hand and in banks

     8,306        9,436   

Notes receivable — trade

     1,477        1,795   

Accounts receivable — trade

     163,355        165,852   

Marketable securities

     22,892        64,387   

Finished goods

     24,367        25,890   

Raw materials

     4,235        5,724   

Work in process

     9,628        8,671   

Supplies

     10,414        9,612   

Deferred tax assets

     17,420        18,050   

Accounts receivable — other

     18,140        22,196   

Short-term loans receivable

     103,557        124,595   

Other current assets

     10,084        10,089   

Allowance for doubtful accounts

     (23     (31

Fixed Assets:

     716,167        668,908   

Tangible fixed assets:

     136,894        130,720   

Buildings

     57,265        61,478   

Structures

     3,017        3,289   

Machinery and equipment

     22,276        21,066   

Vehicles

     4        7   

Tools

     17,288        9,446   

Land

     27,588        28,339   

Leased assets

     96        71   

Construction in progress

     9,357        7,020   

Intangible fixed assets:

     40,650        44,217   

Goodwill

     7,130        7,762   

Leasehold right and others

     13,554        13,074   

Software

     19,958        23,343   

Leased assets

     7        36   

Investments and Other Assets:

     538,621        493,971   

Investment securities

     20,991        16,415   

Affiliates’ securities

     370,859        319,792   

Investment in affiliates

     19,252        19,252   

Long-term loans receivable

     174,799        182,591   

Claims provable in bankruptcy, claims provable in rehabilitation and other

     125        223   

Lease deposit

     6,165        6,328   

Other investments

     4,983        6,518   

Allowance for doubtful accounts

     (58,555     (57,151
  

 

 

   

 

 

 

Total Assets

     1,110,025        1,135,182   
  

 

 

   

 

 

 

 

- 48 -


Non-consolidated Balance Sheets (as of March 31, 2013)

 

     Millions of yen  
     As of March 31,  
     2013     2012  

LIABILITIES

    

Current Liabilities:

     273,669        263,755   

Notes payable — trade

     364        1,885   

Electronically recorded obligations-operating

     6,665          

Accounts payable — trade

     96,403        116,550   

Bonds maturing within one year

     50,000          

Short-term borrowings

            20,000   

Current maturities of long-term borrowings

     29,000        54,000   

Leased obligations

     91        217   

Accounts payable — other

     30,458        21,635   

Accrued expenses

     31,356        29,465   

Accrued corporate tax

     609        303   

Accrued bonuses

     9,110        7,447   

Accrued Directors’ bonuses

     98          

Warranty reserve

     724        875   

Other current liabilities

     18,784        11,373   

Fixed Liabilities:

     233,263        272,157   

Bonds

     75,000        125,000   

Long-term borrowings

     137,800        136,800   

Leased obligations

     90        81   

Long-term accounts payable-other

     77        262   

Retirement benefit obligation

     7,378        4,289   

Asset retirement obligations

     2,116        2,092   

Other fixed liabilities

     10,800        3,631   

Total Liabilities

     506,933        535,912   

(Net Assets)

    

Shareholders’ Equity:

     595,261        594,677   

Common Stock

     135,364        135,364   

Additional paid-in-capital:

     180,804        180,804   

Legal capital reserve

     180,804        180,804   

Retained Earnings:

     316,074        315,461   

Legal reserve

     14,955        14,955   

Other retained earnings

     301,119        300,506   

Reserve for deferral of capital gain on property

     3,341        3,453   

Reserve for special depreciation

     230        351   

Reserve for social contribution

     2        3   

General reserve

     265,350        415,350   

Retained earnings brought forward

     32,195        (118,651

Treasury stock

     (36,982     (36,953

Difference of appreciation and conversion

     7,831        4,592   

Net unrealized holding gains on securities

     7,831        4,592   

Total Net Assets

     603,092        599,269   
  

 

 

   

 

 

 

Total Liabilities and Net Assets

     1,110,025        1,135,182   
  

 

 

   

 

 

 

 

- 49 -


Non-consolidated Statements of Operations (for the year ended March 31, 2013)

 

     Millions of yen  
     For the year ended March 31,  
             2013                     2012          

Net sales

     803,861        795,471   

Cost of sales

     607,473        620,179   

Gross profit

     196,387        175,292   

Selling, general and administrative expenses

     197,907        207,219   

Total operating loss

     (1,520     (31,927

Non-operating income:

     27,899        34,640   

Interest and dividend income

     25,833        27,808   

Other revenue

     2,066        6,831   

Non-operating expenses:

     7,727        10,116   

Interest expense

     5,070        4,947   

Exchange loss

     755        4,312   

Other expenses

     1,901        855   

Ordinary income (loss)

     18,650        (7,402

Extraordinary loss:

     6,074        133,046   

Impairment of fixed assets

     2,771        16,740   

Special extra retirement payments

     1,899        8,469   

Provision of allowance for doubtful accounts of long-term loans

     1,403        56,723   

Loss on valuation of stocks of affiliates

            51,113   

Income (loss) before income taxes

     12,576        (140,449

Corporate, inhabitant and enterprise taxes

     (2,592     (3,635

Refund of income taxes

     (583     (321

Corporate and other tax adjustments

     (95     (7,813
  

 

 

   

 

 

 

Net income (loss)

     15,846        (128,678
  

 

 

   

 

 

 

 

- 50 -


Statement of Changes in Shareholders’ Equity (for the year ended March 31, 2013)

 

           (Unit: millions of yen)  
     Shareholders’ equity     Difference
of
appreciation
and
conversion
     Total net
assets
 
   Common
stock
     Additional
paid-in-capital
     Retained earnings     Treasury
stock
    Total
shareholders’
equity
    Net
unrealized
holding

gains on
securities
    
      Legal capital
reserve
     Legal
reserve
     Other
retained
earnings
(Note)
          

Beginning balance

     135,364         180,804         14,955         300,506        (36,953     594,677        4,592         599,269   

Changes in the term

                    

Dividends from surplus

              (15,226       (15,226        (15,226

Net income

              15,846          15,846           15,846   

Purchase of treasury stock

                (39     (39        (39

Disposal of treasury stock

              (7     10        3           3   

Net changes of items other than shareholders’ equity

                    3,238         3,238   

Total changes in the term

                             613        (29     583        3,238         3,822   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Ending balance

     135,364         180,804         14,955         301,119        (36,982     595,261        7,831         603,092   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Note: Breakdown of other retained earnings

 

     (Unit: millions of yen)  
     Reserve for
deferral of  capital
gain on property
    Reserve for
special
depreciation
    Reserve for
social
contributions
    General reserve     Retained earnings
brought forward
    Total other
retained earnings
 

Beginning balance

     3,453        351        3        415,350        (118,651     300,506   

Changes in the term

            

Dividends from surplus

             (15,226     (15,226

Reversal of reserve for deferral of capital gain on property

     (112           112          

Reversal of reserve for special depreciation

       (121         121          

Transfer of reserve for social contribution

         90          (90       

Reversal of reserve for social contribution

         (90       90          

Reversal of general reserve

           (150,000     150,000          

Disposal of treasury stock

             (7     (7

Net income

             15,846        15,846   

Total changes in the term

     (112     (121     (0     (150,000     150,847        613   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance

     3,341        230        2        265,350        32,195        301,119   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

- 51 -


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 cost using the gross average method (the amounts on the balance-sheets are stated based on the method of devaluing book values by lowered profitability).

4. Depreciation and Amortization

 

(1)

Tangible fixed assets (excluding leased assets):

Depreciated by using the straight-line method. Major useful life is as follows:

 

Buildings:

     5-50 years   

Machinery and equipment:

     4-12 years   

Change in Accounting Policy

The Company has changed the depreciation method for tangible fixed assets from the declining-balance method which was mainly used to the straight-line method beginning this fiscal year and will use this method going forward. The Company deemed the change preferable as the straight-line method deemed more accurately reflect the usage pattern of our assets, since the expected usage pattern for future economic benefit is projected to level off further in the wake of changes in our asset portfolio triggered by factors such as the recent increase in capital investment relating to new manufacturing technologies. As a result, operating loss decreased by ¥7,669 million and ordinary income and income before income taxes increased by ¥7,669 million respectively, compared to the amount calculated by using the conventional method.

(2) Intangible fixed assets (excluding leased 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 3 years. With software for internal use, the Company uses the straight-line method based on a usable period of 3 to 10 years.

Goodwill is amortized using the straight-line method over the period of investment effect (16 years).

 

- 52 -


(3) Leased assets

Finance leases for which ownership does not transfer to lessees;

Ricoh uses straight-line depreciation for Leased assets regarding Lease-term as useful life.

In addition, with regards to Lease contracts on or before March 31, 2008, Ricoh uses accounting similar to the accounting treatment for ordinary sale and purchase transactions.

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) Accrued 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) Accrued Directors’ bonuses:

The reserve for accrued bonuses is provided by estimating the amount of bonuses payable to Directors for the current 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) Retirement benefit obligation:

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. For actuarial gains or losses and for prior service costs, the Company uses straight-line amortization over a certain period of time (15 years) within averaged remaining employment term as incurred in each business year starting from the year following the year of occurrence. For past service liability (PSL) the Company uses straight-line amortization over a certain period of time (15 years) within averaged remaining employment term as incurred in each business year.

6. Consumption Taxes

The consumption tax and the local consumption tax are excluded from profits and losses.

7. Application of Consolidated Taxation System

From the previous fiscal year, the Company has adopted consolidated taxation system with the Company being the consolidated parent company.

 

- 53 -


8. Hedge Accounting

(1) Hedge accounting methods:

With interest-rate swaps, the Company hedges by assigning transactions that meet assignment requirements.

(2) Hedge instruments and targets:

 

Hedging Instruments:

  

Interest swaps

Hedged items:

  

Interests of long-term borrowings

(3) Hedging policies:

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. Interest rate swaps, which the Company hedges by assigning transactions that meet assignment requirements, are exempt.

9. Accounting procedures for term-end matured bills

Term-end matured bills are recorded on their clearing dates. As the term-end date for the fiscal year under review was a bank holiday, the following term-end matured bills were included in the amount of balance at March 31, 2013.

 

Notes receivable-trade

   ¥  55 million   

Notes payable-trade

   ¥ 20 million   

Notes to Non-consolidated Balance Sheets

 

1.    Accumulated depreciation on tangible fixed assets:    ¥ 441,810 million   
2.    Guarantee obligation:   
   Guarantee of employees’ housing loans:    ¥ 5 million   
   Parent company’s guarantee for trade payables by affiliates:    ¥ 927 million   
   Parent company’s guarantee for commercial papers issued by affiliates:    ¥ 28,215 million   

 

- 54 -


3.    Monetary debts and credits for affiliates:   
   Short-term receivable due from affiliates:    ¥  270,764 million   
   Long-term receivable due from affiliates:    ¥ 174,735 million   
   Short-term payable due to affiliates:    ¥ 88,218 million   

Notes to Non-consolidated Statements of Operations

 

1.  

Transaction with affiliates:

  
 

Sales:

   ¥  741,611 million   
 

Purchase:

   ¥ 312,582 million   
 

Non-operating transactions:

   ¥ 41,338 million   
2.  

Impairment loss

  
 

The Company recorded ¥2,771 million of impairment loss for the current fiscal year, which is included in extraordinary loss in the non-consolidated statements of operations. Major breakdown is as follows:

   

 

(1)    Molds, production tools, etc. for the production printing business:

   ¥  2,359 million   

Recoverable value is measured based on their use value, and these assets are evaluated at memorandum value.

  

 

(2)    Land, buildings, etc. of Higashi-matsuyama Office:

   ¥  395 million   

Recoverable value is measured based on their net sales value, and market value is calculated using real estate appraisal, etc.

  

Notes to Statements of Changes in Shareholders’ Equity

 

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:      19,875,662 shares   
3.   Dividends of retained earnings   

 

(1)

Payment of dividends

 

Resolution

   Total amount of
dividends
     Dividends per share      Record date  

Ordinary General Meeting of Shareholders (June 26, 2012)

   ¥ 6,163 million       ¥ 8.50         March 31, 2012   

Board of Directors meeting (October 30, 2012)

   ¥ 9,063 million       ¥ 12.50         September 30, 2012   

(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

 

Resolution (scheduled)

   Total amount of
dividends
     Dividends per share      Record date  

Ordinary General Meeting of Shareholders (June 21, 2013)

   ¥ 11,963 million       ¥ 16.50         March 31, 2013   

 

- 55 -


Notes to Deferred Tax Accounting

Major factors giving rise to deferred tax assets and deferred tax liabilities

Major factors giving rise to deferred tax assets include loss on valuation of stocks of affiliates, allowance for doubtful accounts, and denial of reserve for retirement benefits, while major factors giving rise to deferred tax liabilities are gains on establishment of retirement benefit trust, intangible fixed assets succeeded due to the absorption-type merger* and unrealized holding gains/losses on other securities.

 

*

Deferred tax liability for the non-deductible intangible asset succeeded from Ricoh Printing Systems, Ltd.

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.

 

- 56 -


Notes to Related Party Transactions

(Unit: millions of yen)

 

      

Name of

company, etc.

  

Voting rights
held by
Company

  

Relation with company

  

Description

of

transactions

   Transaction
amount
(Note 3)
     Account
item
   Balance as
of the  fiscal
year under
review
(Note 3)
 

Attribute

        

Concurrent

Directors

  

Business relation

           

Subsidiary

  

Tohoku Ricoh

Co., Ltd.

  

(Possessed) Directly:

100%

   Yes    Manufacturing of the Company’s office equipment   

Purchase of

products (Note 1)

     39,973       Accounts

payable —

trade

     4,022   
               Receipt of dividend     
12,984
  
     

Subsidiary

   RICOH JAPAN Corporation   

(Possessed)

Directly:

100%

   Yes   

Sale of the

Company’s

office equipment

  

Sales of

products

(Note 1)

     363,813       Accounts

receivable

trade

     89,210   

Subsidiary

  

Ricoh Leasing

Company, Ltd.

  

(Possessed) Directly:

46.9% Indirectly:

4.2%

   Yes   

Leasing of the Company’s products

Lending of funds

Factoring

  

Factoring

(Note 4)

     67,868       Accounts

payable —

other

     22,209   
              

Lending of funds

(Note 2)

     678,257       Short-term
loans
Long-term
loans
    

 

 

51,028

 

60,000

  

 

  

Subsidiary

  

RICOH

ELECTRONICS, INC.

  

(Possessed)

Indirectly:

100%

   No   

Manufacturing

of the Company’s office equipment

  

Sales of

components

(Note 1)

     111,828       Accounts

receivable

trade

     5,636   

Subsidiary

  

RICOH

AMERICAS CORPORATION

  

(Possessed)

Indirectly:

100%

   Yes   

Sale of the

Company’s

office equipment

  

Sales of

products

(Note 1)

     25,876       Accounts

receivable

trade

     9,878   

Subsidiary

   RICOH FINANCE CORPORATION   

(Possessed)

Indirectly:

100%

   No    Debt guarantee   

Debt

guarantee

(Note 8)

     11,286              

Subsidiary

   RICOH PRINTING SYSTEMS AMERICA, INC.   

(Possessed)

Directly:

95.6% Indirectly:

4.4%

   No    Lending of funds   

Lending of funds

(Note 2)

     20,691       Short-term
Loans
Long-term
loans
    

 
 

5,789

14,902
(Note 7)

  

  
  

Subsidiary

  

RICOH

PRODUCTION PRINT SOLUTIONS LLC

  

(Possessed) Indirectly:

100%

   Yes    Lending of funds   

Lending of funds

(Note 2)

     18,810       Short-term

Loans
Long-term
loans

    

 
 

15,092

43,219
(Note 7)

  

  
  

Subsidiary

   RICOH AMERICAS HOLDINGS, INC.   

(Possessed) Directly:

100%

   Yes    Lending of funds               Short-term

Loans
Long-term
loans

    

 

28,497

56,430

  

  

Subsidiary

  

RICOH

EUROPE SCM B.V.

  

(Possessed)

Indirectly:

100%

   Yes   

Sale of the

Company’s

office equipment

  

Sales of

products

(Note 1)

     62,046       Accounts

receivable

trade

     17,145   

Subsidiary

  

RICOH

ASIA INDSUTRY LTD.

  

(Possessed)

Directly:

100%

   Yes   

Manufacturing

of the Company’s office equipment

  

Purchase of

components

(Note 1)

     87,257       Accounts

receivable

trade

     7,934   
Companies in which the officer or his/her close relatives own the majority of voting rights, etc.    MUSE Associates, LLC. (U.S.A.) (Note 5)       Director of the Company    Consulting   

Payment of management consulting fees

(Note 6)

     25              

 

- 57 -


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.

 

4.

Under the factoring agreement, the Company has transferred its payment obligations to Ricoh Leasing Company Ltd., with the consent of the payee.

 

5.

MUSE Associates, LLC. (U.S.A.) is a limited liability company wholly owned by the Company’s Outside Director Mr. Mochio Umeda.

 

6.

Prices and other transaction terms are determined through negotiations, based on the general transactions data.

 

7.

¥58,122 million for allowance for doubtful receivables is provided in respect of long-term loans, in the current fiscal year. ¥1,403 million for provision of allowance for doubtful receivables is provided as well for the current fiscal year.

 

8.

The Company has guaranteed the issuance of commercial papers.

Notes to Per-share Information

 

1. Net assets per share:

   ¥ 831.81   

2. Basic net income per share:

   ¥ 21.86   

 

- 58 -


English Transcript of the Independent Auditor’s Report (originally issued in Japanese)

Independent Auditor’s Report

May 17, 2013

The Board of Directors

Ricoh Company, Ltd.

 

 

KPMG AZSA LLC

 

Masahiro Mekada (Seal)

 

Designated Limited Liability Partner

 

Engagement Partner

 

Certified Public Accountant

 

Ryoji Fujii (Seal)

 

Designated Limited Liability Partner

 

Engagement Partner

 

Certified Public Accountant

 

Junichi Adachi (Seal)

 

Designated Limited Liability Partner

 

Engagement Partner

 

Certified Public Accountant

We have audited the consolidated financial statements, comprising the consolidated balance sheets, the consolidated statements of operations, the consolidated statement of changes in equity and the notes to consolidated financial statement of Ricoh Company, Ltd as at March 31, 2013 and for the year from April 1, 2012 to March 31, 2013 in accordance with Article 444-4 of the Companies Act.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the second sentence of Article 120-2-1 of the Ordinance of Companies Accounting that prescribes some omissions of disclosure items required under accounting principles generally accepted in the United States of America, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audit as independent auditor. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above, which were prepared in accordance with the second sentence of Article 120-2-1 of the Ordinance of Companies Accounting that prescribes some omissions of disclosure items required under accounting principles generally accepted in the United States of America, present fairly, in all material respects, the financial position and the results of operations of Ricoh Company, Ltd. and its consolidated subsidiaries for the period, for which the consolidated financial statements were prepared.

Emphasis of Matter

As stated in Significant Accounting Policies 4. of the notes to consolidated financial statements, Ricoh Company, Ltd. and its domestic consolidated subsidiaries changed their depreciation method for tangible fixed assets mainly from declining-balance method to straight-line method, effective April 1, 2012.

This matter bears no impact on our opinion.

Other Matter

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.

Notes to the Reader of Independent Auditor’s Report :

The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as required by the Companies Act.

 

- 59 -


English Transcript of the Independent Auditor’s Report (originally issued in Japanese)

Independent Auditor’s Report

May 17, 2013

The Board of Directors

Ricoh Company, Ltd.

 

 

KPMG AZSA LLC

 

Masahiro Mekada (Seal)

 

Designated Limited Liability Partner

 

Engagement Partner

 

Certified Public Accountant

 

Ryoji Fujii (Seal)

 

Designated Limited Liability Partner

 

Engagement Partner

 

Certified Public Accountant

 

Junichi Adachi (Seal)

 

Designated Limited Liability Partner

 

Engagement Partner

 

Certified Public Accountant

We have audited the financial statements, comprising the balance sheets, the statements of operations, the statement of changes in shareholders’ equity and the notes to financial statements as at March 31, 2013 and for the year from April 1, 2012 to March 31, 2013 in accordance with Article 436-2-1 of the Companies Act.

Management’s Responsibility for the Financial Statements and Others

Management is responsible for the preparation and fair presentation of the financial statements and the supplementary schedules in accordance with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of financial statements and the supplementary schedules that are free from material misstatements, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial statements and the supplementary schedules based on our audit as independent auditor. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the supplementary schedules are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the supplementary schedules. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the financial statements and the supplementary schedules, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements and the supplementary schedules in order to design audit procedures that are appropriate in the circumstances, while the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the supplementary schedules.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements and the supplementary 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 financial statements and the supplementary schedules were prepared, in accordance with accounting principles generally accepted in Japan.

Emphasis of Matter

As stated in Notes Regarding Significant Accounting Policies 4. of the notes to non-consolidated financial statements, Ricoh Company, Ltd. changed its depreciation method for tangible fixed assets mainly from declining-balance method to straight-line method, effective April 1, 2012.

This matter bears no impact on our opinion.

Other Matter

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.

Notes to the Reader of Independent Auditor’s Report:

The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as required by the Companies Act.

 

- 60 -


Transcript of the Audit & Supervisory Board Member’s Report (originally issued in Japanese)

Audit & Supervisory Board’s Report

The Audit & Supervisory Board has prepared this Audit Report upon discussion based on the audit reports prepared by each Audit & Supervisory Board Members concerning the execution of duties by Directors for the fiscal year from April 1, 2012 to March 31, 2013, and hereby reports as follows:

1. Auditing methods employed by Audit & Supervisory Board and the Board Members

The Audit & Supervisory Board prescribed audit policies, assignment of duties and other relevant matters, received reports from each Audit & Supervisory Board Member 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 Audit & Supervisory Board Member complied with the auditing standards of Audit & Supervisory Board Members established by the Audit & Supervisory Board, followed the audit policies, assignment of duties, etc., communicated with Directors, staff of the internal management and control sector, and other employees, etc., strove to collect information and establish the environment for 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 regularly received reports, from Directors, employees, etc., requested explanations from them whenever necessary, and expressed our opinions, for ensuring that the execution of duties by Directors described in the Business Report conforms to the related laws and regulations and the Articles of Incorporation, the details of 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 construction and operation status of an internal control system established in accordance with the said resolution. Meanwhile, we communicated and exchanged information with Directors, Audit & Supervisory Board Members, etc. of subsidiaries, and when deemed necessary, we received reports concerning the business of subsidiaries, visited their head offices and other major business offices, and conducted inquiries. 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 131 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 operations, statement 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 operations, statement of changes in 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 contents of Business Report and 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 LLC, 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 LLC, and the results are appropriate.

May 20, 2013

 

The Audit & Supervisory Board, Ricoh Company, Limited

     

Senior Audit & Supervisory Board Member (Full-time)

   Yuji Inoue      (seal

Audit & Supervisory Board Member (Full-time)

   Mitsuhiro Shinoda      (seal

Audit & Supervisory Board Member

   Takao Yuhara      (seal

Audit & Supervisory Board Member

   Tsukasa Yunoki      (seal

 

Note:

  

Audit & Supervisory Board Members Takao Yuhara and Tsukasa Yunoki are Outside Audit & Supervisory Board Members in accordance with Article 2, Item 16 and Article 335, Paragraph 3 of the Corporate Law.

 

- 61 -


Guidelines for Exercise of Voting Rights via the Internet

The Online Voting Website

Online votes can only be cast from the Online Voting Website below specified by the Company. Please note that you will not be able to use cellular phones as a terminal for exercising voting rights via the Internet.

 

 
     

Online Voting Website: http://www.web54.net

 

     

Handling of Votes

 

   

To exercise your voting rights via the Internet, use the “Voting right exercise code” and “Password” in the included voting form, and enter your votes following the on-screen guidance.

 

   

When you access the designated website, you are requested to create a new eight-digit password. Please prepare the eight-digit password in advance.

 

   

Please cast your votes as early as possible. The deadline for voting is Thursday, June 20, 2013 at 5:30 p.m., the day before the Ordinary General Meeting of Shareholders will be held.

 

   

If you vote multiple times, the last vote that we receive will be counted as your vote. If we receive online votes and paper votes on the same day, the online votes will be counted as the valid vote.

 

   

Expenses incurred when accessing the website designated for exercising voting rights (fees for Providers and carriers such as ISP access charges) shall be borne by shareholders.

Handling of the Password

 

   

Please keep secret the new password you create 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 rights or to change your approval or disapproval in respect of the agenda you voted on via the Internet.

(We regret that we will not be able to answer questions you may wish to ask regarding a new password.)

 

   

If the password is entered incorrectly a predetermined number of times, then the site will become locked and you will not be able to exercise your voting rights or to change your approval or disapproval in respect of the agenda you voted on via the Internet. If you would like your password to be re-issued, please follow the on-screen guidance.

 

   

The voting right exercise code on the voting form is valid only for this Ordinary General Meeting of Shareholders.

 

- 62 -


Inquiries Relating to Computer Operation, Etc.

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

 

    

System Requirements

When exercising your voting rights via the Internet, please make sure that your system meets the following requirements.

 

   

The screen resolution must be at least 800 x 600 pixels (SVGA).

 

   

The following applications must be installed.

A. As your web browser, Microsoft ® Internet Explorer version 5.01 SP2 or later

B. As your PDF file viewer, Adobe ® Acrobat ® Reader™ version 4.0 or later, or Adobe ® Reader ® version 6.0 or later

 

  *  

Internet Explorer is a trademark or registered trademark and a product name of Microsoft Corporation in the United States and other countries. Adobe ® Acrobat ® Reader™ and Adobe ® Reader ® are trademarks or registered trademarks and product names of Adobe Systems Incorporated in the United States and other countries.

 

  *  

This software is available free of charge on each company’s website.

 

   

Please disable (or temporarily disable) any popup blockers enabled in your browser, any add-in tools, or the like.

 

   

If you cannot access the site above, please check the settings of your firewall, proxy server, antivirus software, and the like, as the configuration of this software could restrict connection to the Internet.

 

- 63 -

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