Ricoh 1999 Annual Report Download - page 30

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27
3) Infrastructure
The domestic and international segments of Ricoh’s core in-house network,
called R-Wan, are almost Y2K-compliant. Completion is scheduled for
September 1999. Most local area networks have been fixed. Here, too, the
completion target is September 1999.
3. Facilities
Most development and production facilities were Y2K-compliant by June
1999. The remainder should be ready by September 1999. The full
switchover to a Y2K environment is scheduled for November 1999.
Most air conditioners, dining facilities, elevators, building entrances and
exits, and telephone systems are Y2K-compliant; all will be ready by Septem-
ber 1999.
4. Vendors
Ricoh has surveyed and collected responses from all main vendors. The
Company has identified no vendors with potential delivery difficulties.
Order management systems that Ricoh has supplied its sales companies
and dealers are almost all Y2K-compliant. After installing new versions of
Ricoh-provided software, all will be ready.
It is difficult to accurately estimate Y2K-related costs because the readiness
effort has been both internal and external. The parent company and main
Group members have allocated around ¥1.5 billion externally to their Y2K
programs. To date, ¥1.05 billion has been spent. The remainder is slated for
fiscal 2000.
Y2K costs will not materially affect the performances of Group members
or the parent company.
Ricoh is a global business and deals with many external parties. As a re-
sult, it is hard to precisely measure the impact of Y2K. While the Company
has taken all necessary steps to resolve all projected Y2K issues and minimize
the impact of Y2K, Ricoh cannot guarantee invulnerability to related litiga-
tion.
After reviewing the status of Y2K responses, Ricoh intends to plan and
launch contingency programs before September 1999 to cover both products
in the field and in-house systems, such as its communications infrastructure,
information systems, development and production facilities, and operational
facilities.
The Euro
On January 1, 1999, 11 of the 15 member countries of the European Union
(EU) established fixed conversion rates between their existing currencies
and their new common currency—the euro. The euro trades on currency ex-
changes and the existing currencies remain legal tender in the participating
countries for a transition period until January 1, 2002.
The introduction of the euro reduces Ricoh’s exposure to the change
in foreign exchange rates caused by intra-EU transactions, while it has
increased the pace of price harmonization throughout Europe. Ricoh is
analyzing its pricing strategy to minimize any potential risk from price
harmonization.
Ricoh estimates that the euro conversion will not have a material
impact on its financial condition or results of operations.
Forward-Looking and Cautionary Statements
Certain statements contained in this annual report may constitute forward-
looking statements, which involve a number of risks, uncertainties and other
factors that would cause actual results to differ materially from those project-
ed or implied elsewhere in this annual report.