Ricoh 2005 Annual Report Download

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Table of contents

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    Earning the public s trust; Activity reports from 3 perspectives ฀ environment corporate social responsibility and economy ฀

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    Annual Report • Management policy • Management results • Financial status Sustainability Report (Environment) • Concept of sustainable management • Basis for sustainable management • Efforts made for products • Efforts made by business sites • Social contribution for environmental ...

  • Page 4
    .... In this last year of our 14th midterm plan, the Ricoh Group set a goal to expand its revenue base through total document volume (T DV) as its principal strategy, and has increased sales by promoting core products such as color plain-paper copiers (PPCs) and printing systems. In addition, strategic...

  • Page 5
    ... to color copy or print 45 sheets per minutes, and the imagio Neo C455 series, which uses color PxP toner with Ricoh's original polymerization method. After implementing these measures, the Ricoh Group now boasts a high market share in color copiers in Japan, the United States and Europe. Corporate...

  • Page 6
    ... of Hitachi Printing Solutions was completed on October 1, 2004, and the company became a member of the Ricoh Group as Ricoh Printing Systems, Ltd. We will strive to expand our printer business and provide a wide variety of products by combining Ricoh Printing Systems' high-speed, high-reliability...

  • Page 7
    ... Mid-term Business Plan begun in April 2005, three target areas were chosen after considering changes in the market: printing, the emerging markets, and the industrial field. T he Ricoh Group must strengthen its competitive edge by creating new value and developing highly efficient management if it...

  • Page 8
    ... imagio Neo C600 High-speed digital color multifunction copier, capable of printing or copying 45 ppm in color and 60 ppm in black and white. replacing analog machines with digital machines and multifunctional printers (MFPs), and sales decreased 20.9% compared with the previous year. T otal sales...

  • Page 9
    ... and color models increased worldwide. T he new company acquired last year, Ricoh Printing Systems, Ltd., also contributed to business performance in this area. In addition, sales of the GELJET low-cost business color printers continued to increase. (General Information by Business Area) Review of...

  • Page 10
    ... Caplio R2, featuring a large LCD and super zoom lens. Sales Made in Other Businesses (Billions of Yen) 250 217.7 200 150 100 50 0 2001 (FY) 2002 2003 2004 2005 199.8 186.9 222.6 222.2 Caplio R2 Slim, 5 megapixel digital camera with a large, 2.5" LCD and a super 4.8x optical zoom. 9 ANNUAL REPORT...

  • Page 11
    ...-sheet is fed using air pressure, in order to increase reliability in high-speed printers. By using a frame with high rigidity to achieve dimensional accuracy, the paper feed system is made more stable and the risk of paper jams has been greatly reduced. Corporate Social Responsibility new OPC film...

  • Page 12
    .... 3. In all our business activities, we strive for awareness of environmental impact, thereby involving all Ricoh employees in implementing continuous improvements to prevent pollution, use energy and natural resources more efficiently. 4. To provide our products and services, we spare no effort...

  • Page 13
    ... the Ricoh Business Code of Conduct to reflect more responsible corporate activities that achieve harmony with society and the global environment together with the establishment of the Ricoh Group CSR Charter. Please refer to Ricoh's Web site for details. Financial Section ANNUAL REPORT 2005 12

  • Page 14
    ... those of fiscal year 1990. That is higher than the goal for Japan of 6% reduction set out in the Kyoto Protocol. Following the Kyoto Protocol, the Ricoh Group wants to take this opportunity to create new corporate value, as a leader in environmental management. Each Company's Attitude Challenged...

  • Page 15
    ... Innovation Quick Start-Up (QSU) technology allows copiers to ฀ Refer to "Downsized production lines for photosensitive materials" (p. 35) of the 2005 RICOH GROUP ฀ SUST AINABILIT Y REPORT (ENVIRONMENT ). ฀ ฀ Corporate Social Responsibility Environment Financial Section ANNUAL REPORT 2005...

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    ... foreign exchange rate fluctuations, consolidated net sales increased 2.4% from the previous fiscal year. In term s of dom estic m arket, sales increased for printing system s such as MFPs ( m ultifunction printers) and laser printers. Ricoh Printing System s, Ltd., our newly acquired printer com...

  • Page 19
    ..., networking, color technology, and higher output speed. As a result, sales, particularly those of such printing system s as MFPs and laser printers, have soared. Continuing sales gains were also seen in solutions business, including custom er Review of Operations Technology support and service...

  • Page 20
    ...sales both in Japan and overseas. Ricoh Printing System s, Ltd., a new subsidiary of the Ricoh Group, has contributed to the sales growth. The com pany have also seen continuing increase in sales of the Gel-Jet printer, a low-priced color printer for office use. As a result, sales of Printing System...

  • Page 21
    ...- 24,347 ¥34,347 ¥ - 1,000 40 ¥132,353 22,010 213,458 ¥367,821 (General Information by Business Area) Review of Operations ¥1,040 Thousand of U.S. dollars Expected m aturity date Average pay rate Total 2006 2007 2008 2009 2010 2011 and thereafter Fair Value Bonds Medium -Term Notes Loans...

  • Page 22
    ... digital plain paper copiers ( "PPCs") , m ulti-functional printers ( "MFPs") and laser printers, and m anufacturing facilities to m aintain or enhance com petitiveness in the industry. In fiscal year 2005, Ricoh also invested a significant am ount of capital to upgrade its inform ation system s for...

  • Page 23
    ... contracts with a diversified group of financial institutions having credit ratings satisfactory to Ricoh to m inim ize the concentration of credit risk. Therefore, Ricoh does not expect to incur Corporate Social Responsibility m aterial credit losses on its financial instrum ents. EQUITY PRICE...

  • Page 24
    Selected Financial Data Ricoh Com pany, Ltd. and Consolidated Subsidiaries For the Years Ended March 31 1996 1997 1998 For the Year: Net sales Cost of sales Selling, general and adm inistrative expense Incom e before incom e taxes, m inority interests and equity in earnings of affiliates Provision...

  • Page 25
    ...(General Information by Business Area) Review of Operations ¥ 44.33 ...Corporate Social Responsibility ¥ 1,634 969 ¥ 2,525 1,078 ¥ 2,495 1,627 ¥ 2,735 1,563 ¥ 2,470 1,637 ¥ 2,365 1,607 ¥ 2 ,3 4 5 1 ,7 8 2 $ 2 1 .9 2 1 6 .6 5 Environment Financial Section ANNUAL REPORT 2005...

  • Page 26
    ... Marketable securities Trade receivablesNotes Accounts Less- Allowance for doubtful receivables Current m aturities of long-term finance receivables, net InventoriesFinished goods Work in process and raw m aterials Deferred incom e taxes and other Total current assets 2004 2005 2005 ¥ 203,039...

  • Page 27
    ...Business Area) Review of Operations Long-term Liabilities: Long-term indebtedness Accrued pension...Corporate Social Responsibility Shareholders' Investment: Com m on stock; Authorized - 993,000,000 shares in 2004 and 2005 Issued...1 8 ,2 5 8 ,5 8 9 Environment Financial Section ANNUAL REPORT 2005 26

  • Page 28
    Consolidated Statements of Income Ricoh Com pany, Ltd. and Consolidated Subsidiaries For the Years Ended March 31, 2003, 2004 and 2005 2003 Millions of Yen 2004 Thousands of U.S. Dollars 2005 2005 Net Sales Cost of Sales Gross profit ¥1,738,358 993,009 745,349 611,695 ¥1,780,245 1,014,619 ...

  • Page 29
    ... 2005 Common Stock: Beginning balance Conversion of convertible bonds; 24,633,822 shares in 2003 Ending balance ¥120,461 14,903 ¥135,364 ¥135,364 - ¥135,364 ¥ 1 3 5 ,3 6 4 - ¥ 1 3 5 ,3 6 4 $ 1 ,2 6 5 ,0 8 4 - $ 1 ,2 6 5 ,0 8 4 (General Information by Business Area) Review of Operations...

  • Page 30
    ...) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS NET INCREASE ( DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ADJUSTMENT FOR CHANGE IN FISCAL YEAR END OF CONSOLIDATED SUBSIDIARIES CASH AND CASH EQUIVALENTS AT END OF YEAR SUPPLEMENTAL DISCLOSURES...

  • Page 31
    ...as Gestetner, Lanier and Savin. Ricoh m anufactures its products prim arily in 15 plants in Japan and 6 (General Information by Business Area) plants overseas, which are located in the United States, United Kingdom , France and China. Review of Operations 2 . SIGNIFICANT ACCOUNTING AND REPORTING...

  • Page 32
    ... For foreign operations with functional currencies other than the Japanese yen, assets and liabilities are translated at the exchange rates in effect at each fiscal year-end, and incom e and expenses are translated at the average rates of exchange prevailing during each fiscal year. The resulting...

  • Page 33
    ...paired as of April 1, 2002. Ricoh also com pleted the annual assessm ent for the years ended March 31, 2003, 2004 and (General Information by Business Area) 2005 and determ ined that no goodwill im pairm ent charge was necessary. Review of Operations 2005 ( l) Pension and Retir ement Allowances...

  • Page 34
    ... from potential com m on stock equivalents such as convertible bonds. Ricoh has no dilutive securities outstanding as of and for the years ended March 31, 2004 and 2005, and therefore there is no difference between basic and diluted net incom e per share. ( u) New Accounting Standar ds In March...

  • Page 35
    ...are estim ated to have a rem aining useful life of 5 to 12 years. Goodwill arising from the acquisition of RPS has all been allocated to the office equipm ent segm ent. Furtherm ore, Ricoh acquired other im m aterial entities during the year ended March 31, 2005 for consideration of ¥1,541 m illion...

  • Page 36
    ..., because the servicing fees adequately com pensate Ricoh. Ricoh's retained interests are subordinate to the investor's interests. Their value is subject to credit and interest rate risk on the sold financial assets. The investors and Special Purpose Entities that hold the lease receivables have lim...

  • Page 37
    ...$ 1 ,2 8 1 9 Financial Section $ 1 ,2 9 0 $ 1 5 3 ,7 4 8 5 6 ,4 9 5 1 5 ,9 7 2 $ 2 2 6 ,2 1 5 ¥ 9 ,0 2 1 45 480 ¥ 9 ,5 4 6 ¥ 49 - - ¥ 49 Other non-current securities m ainly indude investm ent trusts consisting of investm ent in m arketable debt and equity securities. ANNUAL REPORT 2005 36

  • Page 38
    ...of m arketable equity securities to the Trust for fiscal 2004 of ¥2,658 m illion. In addition, Ricoh recognized in its fiscal 2004 consolidated statem ent of incom e a cum ulative effect of accounting change, net of tax, of ¥7,373 m illion associated with the 2000 Transfer. 37 ANNUAL REPORT 2005

  • Page 39
    ... 6 ,7 5 7 Review of Operations The significant transactions of Ricoh with these affiliates for the years ended March 31, 2003, 2004 and 2005, and the related account balances at March 31, 2004 and 2005 are sum m arized as follows: Thousands of U.S. Dollars 2005 2005 Financial Position Dividend...

  • Page 40
    ... 8 ,7 2 9 Gross carrying am ount of software was increased for the year ended March 31, 2005 m ainly due to back-office inform ation system s developm ent. Other intangible assets subject to am ortization other than software was increased for the year ended March 31, 2005 m ainly due to acquisition...

  • Page 41
    .... The norm al statutory tax rate differs from the effective tax rate for the years ended March 31, 2003, 2004 and 2005 as a result of the Technology following: 2003 2004 2005 Norm al statutory tax rate Nondeductible expenses Tax benefits not recognized on operating losses of certain consolidated...

  • Page 42
    ...pany and certain of its subsidiaries enter into the contracts with financial institutions regarding lines of credit and overdrawing. Those sam e financial institutions hold the issuing program s of com m ercial paper and m edium -term notes. Unused lines of credit am ounted to ¥634,273 m illion and...

  • Page 43
    ...: Thousands of Environment Years ending March 31 Millions of Yen U.S. Dollars 2006 2007 2008 2009 2010 2011 and thereafter Total ¥144,572 100,418 54,105 34,105 34,561 1,592 ¥369,353 $1,351,140 938,486 505,654 318,738 323,000 14,879 $3,451,897 Financial Section ANNUAL REPORT 2005 42

  • Page 44
    ...pension insurance benefit was included and com m ingled with the prim ary corporate benefit provided by Ricoh. These contributory and non contributory plans were funded in conform ity with governm ental regulations which basically require an em ployer to contribute the unfunded benefit over 20 years...

  • Page 45
    ... increase 2.9% 3.4% 3 .0 % 3 .5 % Weighted-average assum ptions used to determ ine the net periodic benefit cost for the years ended March 31, 2003, 2004 and 2005 were as follows: 2003 2004 2005 Environment Discount rate Rate of com pensation increase Expected long-term return on plan assets...

  • Page 46
    ...arketable and can be sold to fund benefit paym ent obligations as they becom e payable. Ricoh uses a Decem ber 31 m easurem ent date for the pension plans. Ricoh expects to contribute ¥12,260 m illion ( $114,579 thousand) to its pension plan for the year ended March 31, 2006. The following benefit...

  • Page 47
    ...31, 2005. The Japanese Com m ercial Code provides that at least one-half of the proceeds from shares issued is included in com m on stock. In...during the year Less- Reclassification adjustm ent for ( gains) losses realized in net incom e Net unrealized gains ( losses) Minim um pension liability ...

  • Page 48
    ...consolidated subsidiaries Change during the year Ending balance ¥ ( 1 9 ,4 1 1 ) ( 1 ,8 4 9 ) 9 ,0 4 1 ¥ ( 1 2 ,2 1 9 ) ¥ 4 ,0 2 6 - 765 ¥ 4 ,7 9 1 ¥(24) - 141 ¥117 ¥ ( 1 4 ,8 6 3 ) 184 27 ¥ ( 1 4 ,6 5 2 ) ¥ ( 3 0 ,2 7 2 ) ( 1 ,6 6 5 ) 9 ,9 7 4 ¥ ( 2 1 ,9 6 3 ) 47 ANNUAL REPORT 2005

  • Page 49
    ... Shareholders and Customers Thousands of U.S. Dollars 2005: Beginning balance Adjustm ent for change in fiscal year end of consolidated subsidiaries Change during the year Ending balance $ ( 1 8 1 ,4 1 1 ) ( 1 7 ,2 8 0 ) 8 4 ,4 9 5 $ ( 1 1 4 ,1 9 6 ) $ 3 7 ,6 2 6 - 7 ,1 5 0 $ 4 4 ,7 7 6 $(224...

  • Page 50
    ... ent discounted using the current borrowing rate for sim ilar instrum ents of com parable m aturity. ( b) Mar ketable secur ities and Investment secur ities The fair value of the m arketable securities and investm ent securities is principally based on quoted m arket price. 49 ANNUAL REPORT 2005

  • Page 51
    ...value of foreign currency contracts and foreign currency options is estim ated by obtaining quotes from brokers. (General Information by Business Area) Review of Operations Millions of Yen 2004 Carrying Am ount Estim ated Fair Value Carrying Am ount Thousands of U.S. Dollars 2005 Estim ated Fair...

  • Page 52
    ...system s, and others, including optical equipm ent and electronic devices. The following tables present certain inform ation regarding Ricoh's operating segm ents and operations by geographic areas for the years ended March 31, 2003, 2004 and 2005. ( a) Oper...$ 1 ,2 6 5 ,2 6 1 51 ANNUAL REPORT 2005

  • Page 53
    ... of custom ers and long-lived assets by location for the years ended March 31, 2003, 2004 and 2005 are as follows: Thousands of Millions of Yen 2003 2004 U.S. Dollars Corporate Social Responsibility 2005 2005 SalesJapan The Am ericas Europe Other Consolidated Long-Lived AssetsJapan The Am ericas...

  • Page 54
    ... inform ation shows net sales and operating incom e recognized by geographic origin for the years ended March 31, 2003, 2004 and 2005. In addition to the disclosure requirem ents under SFAS No. 131, "Disclosure about Segm ents of an Enterprise and Related Inform ation", Ricoh discloses this inform...

  • Page 55
    ... charged to selling, general and adm inistrative expenses for the years ended March 31, 2003, 2004 and 2005: Thousands of Millions of Yen 2003 2004 U.S. Dollars (General Information by Business Area) Review of Operations 2005 2005 Research and developm ent costs Advertising costs Shipping and...

  • Page 56
    ... statem ents referred to above present fairly, in all m aterial respects, the financial position of Ricoh Com pany, Ltd. and subsidiaries as of March 31, 2004 and 2005, and the results of their operations and their cash flows for each of the years in the three-year period ended March 31, 2005, in...

  • Page 57
    ...Limited Brazil Gestetner do Brazil S.A. Sweden NRG Scandinavia AB Philippin es Ricoh ( Philippines) , Inc. Can ada Ricoh Canada Inc. Belgiu m Lanier Belgium N.V ./S.A. NRG Belgium S.A. Switzerlan d Lanier ( Schweiz) AG Sin gapore Ricoh Asia Pacific Pte. Ltd. Ricoh ( Singapore) Pte Ltd. Chile...

  • Page 58
    Senior Management As of June 28,2005 Boar d of Dir ector s Repr esentative Dir ector s Masam itsu Sakurai Tatsuo Hirakawa Executive Officer s Pr esident Masam itsu Sakurai Gr oup Executive Officer s Cor por... Daisuke Segawa Hisashi Takata Kenichi Matsubayashi Kunihiko Satoh 57 ANNUAL REPORT 2005

  • Page 59
    ... Listing on Eur onext Par is Euroclear France Calyon Corporate and Investm ent Bank Banque Nom ura France Independent Public Accountants KPMG Tr ansfer Agent for Common Stock The Chuo Mitsui Trust and Banking Co., Ltd. 33-1, Shiba 3-chom e, Minato-ku, Tokyo 105-8574, Japan ANNUAL REPORT 2005 58

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