Ricoh 2007 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ...฀of฀the฀environment,฀ the฀ economy,฀ and฀ corporate฀ social฀ responsibility฀ as฀ well฀ as฀openly฀communicating฀its฀activities.฀The฀฀Ricoh฀Group฀ publishes฀ information฀ on฀ its฀ activities฀ in฀ reports฀ written฀ from฀฀three฀฀different...

  • Page 3
    ...Profile Ricoh฀Company,฀Ltd.,฀is฀a฀leading฀global฀manufacturer฀of฀offi ฀ce฀automation฀equipment.฀฀Our฀lineup฀includes฀copiers,฀multifunctional฀and฀other฀ printers,฀facsimiles,฀personal฀computers,฀optical฀disc฀products,฀and฀related฀ supplies...

  • Page 4
    ...-term Management Plan, the Ricoh Group has strived to reform its business structure for Office Solutions, its main business segment, to "not only manufacture and sell copiers and printers but to support improvement and innovation in the customer's operations by providing devices and systems." Also...

  • Page 5
    ... new color MFPs and color laser printers in Japan and overseas, and the product lineup was further filled out. For the high-end production printing market, in addition to further strengthening its products, Ricoh forged an agreement with IBM Corporation to establish InfoPrint Solutions Company...

  • Page 6
    ... even more to enhance the ease of use of Ricoh products and services, support the knowledge creation activities of our business customers and provide environmentally sustainable products and services. In addition, we continue to pursue high-efficiency management in order to increase profitability...

  • Page 7
    To O u r S h a r e h o l d e r s a n d C u s t o m e r s Shiro Kondo President and Chief Executive Officer Masamitsu Sakurai Chairman ANNUAL REPORT 2007 6 Financial Section Brand Communications CSR Environmental Management Corporate Governance Business Strategy Highlights To Our ...

  • Page 8
    ... and laser printers. Overall sales rose 8.4% from the previous fiscal year. This was the first time that group consolidated sales exceeded 2 trillion yen, and Ricoh achieved increased sales for the 13th year in a row. Thanks to, among other things, increased sales of high - value - added products...

  • Page 9
    ... activities, for income of Â¥51.8 billion. ANNUAL REPORT 2007 8 Financial Section Brand Communications Common stock price CSR Environmental Management Corporate Governance â- Operating cash ï¬,ow, investment cash ï¬,ow, Business Strategy Highlights 11.0ï¼... ROE Return on assets To...

  • Page 10
    ... MP C2500 IPSiO SP C411 â- Products Imaging Solutions: Digital copiers, color copiers, multifunction printers (MFPs), printers, analog copiers, digital duplicators, facsimiles, diazo copiers, scanners, and other equipment and related supplies, maintenance services, software, etc. Network System...

  • Page 11
    ...previous year to ¥1,774.4 billion. New color MFP products garner high marks world-wide. On January 30, 2007, Aficio C2500 was named Pick of the Year in the multifunction (BLI), a global office automation equipment evaluation agency. Also, in March, Aficio MP C4500 eamed the highest score in the...

  • Page 12
    ... the form of black and white to color (B to C) Growth areas in the printing Document Volume Office high-end Production printing High Mid MFP LP Low GEL GET printers Low-end MFP/LP Office low-end Office Laser Printers Market Business, Personal Core System Production transition and total...

  • Page 13
    ...Overseas Monochrome printing speed ＊As of May 1, 2007 Aficio MP C4500/C3500 series implements energy-saving "color QSU" technology with IH fusing Copiers/MFPs hardware sales value base Magnetic field control board Heating roller IH coil Ferrite roller ANNUAL REPORT 2007 12 Financial Section...

  • Page 14
    ...Digital camera Scanner Stand-Alone Equipment Providing leading products of copier, printer and facsimile, which form the core of our business Copier Printer Facsimile Alliance with Adobe Systems Inc. "@Remote" remote management solutions In May 2006, Ricoh and Adobe Systems Inc. (California...

  • Page 15
    ... the line-up for products for Production Printing Ricoh Imaging products and software (higher speed, reliability and print quality) Manufacturing Solution Service and support network Aficio MP 1350 Acquiring customer base, network and software Business Strategy Acquiring hardware and development...

  • Page 16
    ... such products as the "Aficio SP C411" color laser printer, which supports a wide range of uses from general office applications to commercial applications, and the "Aficio GX series," which incor- porates Ricoh's advanced GEL JET technology for higher resolution and faster printing. "Aficio GX...

  • Page 17
    ... printer to automatically print both sides at a high-speed 240 pages per minute (A4, 120 pages for duplex). Structural diagram of newly developed one-drum duplex platemaking Completion of plant for "PxP toner" Management Acquisition of European operation of Danka Business Systems Ricoh rated...

  • Page 18
    ... the Eco Products International Exposition 2006 was held in Singapore. Ricoh was in a category by itself as an office equipment manufacturer. "imagio MP C1500" wins Energy Saving Grand Prize "No.1 Color Laser Printer in Customer Satisfaction Among Business Users" J.D. Power Asia Pacific 2006 Japan...

  • Page 19
    ... of operations of division and group companies. ANNUAL REPORT 2007 18 Financial Section 4. Systems to ensure appropriate compliance with laws, and Articles of Incorporation concerning the performance of employee's duties. Brand Communications 2. Systems related to the retention and management...

  • Page 20
    ...image the Ricoh Group wants to create Reliable and attractive worldwide company Objective of Ricoh Group CSR To become a company that is loved by society and whose development is expected by people who wish to buy company's products. wish to invest in the company. wish to work for the company. wish...

  • Page 21
    ... set based on the 2050 Extra-Long-Term Environmental Vision Major direction and goals All aspects of the Earth are well balanced. 2000 FY 2007 2010 2020 2030 2040 2050 Signature of joint declaration concerning climate change Ricoh included in SRI funds and indexes ＊ ＊ GROCC: Global...

  • Page 22
    ... during major league baseball games via 14 channels including FOX Sports, YES Network (New York Yankees cable channel), and Sports Net New York (New York Mets cable channel). Print media: IT magazines such as Computer Reseller News (CRN), InfoWorld, etc. Highly reliable Ricoh products help create...

  • Page 23
    ...Report on Internal Control Over Financial Reporting Report of Independent Registered Public Accounting Firm Corporate Social Responsibility Ricoh's Global Network Senior Management Corporate Data 23 29 31 33 34 35 36 64 65 67 69 70 71 ANNUAL REPORT 2007 22 Financial Section Brand Communications...

  • Page 24
    ... of digital plain paper copiers (PPCs), multifunctional printers (MFPs) and printers, mainly for color products. Sales of IT services also increased resulting from the expansion of the solutions business. As for Industrial Products, sales in semiconductors, electronic components and thermal media...

  • Page 25
    ... diverse range of customer needs for color, networking and high-speed products. As a result, sales of PPCs, MFPs and laser and GELJET printers exceeded the last fiscal year's level in both color and black/white product categories, bringing overall sales in the Office Solutions segment up 10.1% over...

  • Page 26
    ...printers exceeded last year's level in both color and black/white product categories, bringing overall sales in the Office Solutions segment up 16.3% over the previous corresponding period. Sales in the Industrial Products also increased due to the favorable performance of the thermal media business...

  • Page 27
    ... respectively. Ricoh directs a significant portion of its capital expenditures towards digital and networking equipment, such as PPCs, MFPs and laser and GELJET printers, and manufacturing facilities to maintain or enhance its competitiveness in the industry. Ricoh ANNUAL REPORT 2007 26 Financial...

  • Page 28
    ... in these areas for fiscal year 2007, and there are no material quantitative changes in market INTEREST RATE RISK In the ordinary course of business, Ricoh enters into interest rate swap agreements to reduce interest rate risk and to modify the interest rate characteristics of its outstanding debt...

  • Page 29
    ... from changes in their market prices. Marketable securities consist of a diversified pool of equity securities. Total ¥55,680 ¥70,539 $471,864 $597,788 ANNUAL REPORT 2007 28 Financial Section Brand Strategy CSR Environmental Management Corporate Governance Business Strategy EQUITY...

  • Page 30
    ... sale of a business, the operating results from the discontinued operations have been reclassified in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" from fiscal year 2003 to 2006. 29 ANNUAL REPORT 2007

  • Page 31
    ...¥ 2,495 1,627 ¥ 2,735 1,563 ¥ 2,470 1,637 ¥ 2,365 1,607 ¥ 2,345 1,782 ¥ 2,360 1,646 ¥ 2,775 1,991 $ 23.52 16.87 ANNUAL REPORT 2007 30 Financial Section Brand Strategy CSR Environmental Management Corporate Governance Business Strategy Highlights To Our Shareholders and...

  • Page 32
    Consolidated Balance Sheets Ricoh Company, Ltd. and Consolidated Subsidiaries March 31, 2006 and 2007 ASSETS Current assets: Cash and cash equivalents Time deposits Marketable securities Trade receivablesNotes Accounts Less- Allowance for doubtful receivables Current maturities of long-term ...

  • Page 33
    ... AND SHAREHOLDERS' INVESTMENT Current liabilities: Short-term borrowings Current maturities of long-term indebtedness Trade payablesNotes Accounts Accrued income taxes Accrued expenses and other Total current liabilities Millions of Yen 2006 2007 Thousands of U.S. Dollars 2007 ¥ 82,520 103...

  • Page 34
    ...Ricoh Company, Ltd. and Consolidated Subsidiaries For the Years Ended March 31, 2005, 2006 and 2007 2005 Millions of Yen 2006 2007 Thousands of U.S. Dollars 2007 Net sales: Products Post sales and rentals... financial statements are an integral part of these statements. 33 ANNUAL REPORT 2007

  • Page 35
    ...gains on available-for-sale securities Minimum pension liability adjustments Net unrealized losses on derivative instruments Cumulative translation adjustments Total comprehensive income Adjustment to initially apply SFAS 158 Net changes in treasury stock Balance at March 31, 2007 ¥135,364 186,599...

  • Page 36
    ... received Deferred income taxes Losses on disposals and sales of property, plant and equipment Pension and severance costs, less payments Changes in assets and liabilities, net of effects from acquisition(Increase) decrease in trade receivables (Increase) decrease in inventories Increase in finance...

  • Page 37
    ... 1936 and is headquartered in Tokyo, Japan. The Company and its consolidated subsidiaries ("Ricoh" as a consolidated group) is a world-wide supplier of office automation equipment, including copiers, facsimile machines, data processing systems, printers and related supplies. Ricoh is also well known...

  • Page 38
    ... as either held-to-maturity, trading, or available-for-sale securities. As of March 31, 2006 and 2007, all of Ricoh's investments in debt and marketable equity securities are classified as available-for-sale securities. Those available-for-sale securities are reported at fair value with unrealized...

  • Page 39
    ...REPORT 2007 38 Brand Strategy (k) Capitalized Software Costs In accordance with Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use", Ricoh capitalizes qualifying cost of computer software. Costs incurred during the application...

  • Page 40
    ... of cash flows: Millions of Yen 2005 2006 2007 Thousands of U.S. Dollars 2007 Capital lease obligations incurred ¥ 865 ¥ 261 Issuance of treasury stock in exchange for subsidiary's stock 2,545 905 ¥ 54 - $ 458 - (t) Use of Estimates Management of Ricoh has made a number of estimates and...

  • Page 41
    ... of the Company acquired the European operations of Danka Business Systems PLC (now known as Infotec Europe B.V. ) for total cash consideration of ¥27,132 million ($229,932 thousand) including direct acquisition costs. Ricoh made the acquisition to strengthen its sales and service network in major...

  • Page 42
    ... installment loans. Ricoh's products are leased to domestic customers primarily through Ricoh Leasing Company, Ltd., a majority-owned domestic subsidiary and to overseas customers primarily through certain overseas subsidiaries. These leases are accounted for as sales-type leases in conformity with...

  • Page 43
    .... ANNUAL REPORT 2007 42 Brand Strategy CSR Environmental Management Corporate Governance Ricoh Leasing Company, Ltd. has also extended certain other types of loans as part of its business activity, which are primarily residential housing loans to current and former employees in Japan secured...

  • Page 44
    ... 2007 Thousands of U.S. Dollars 2007 Marketable securities: Available-for-sale securities Investment securities: Available-for-sale securities Non-marketable equity securities ¥162 ¥29,934 6,485 ¥36,419 ¥ 177 $ 1,500 $596,288 37,915 $634,203 ¥70,362 4,474 ¥74,836 43 ANNUAL REPORT 2007

  • Page 45
    ...debt securities classified as available-for-sale as of March 31, 2007, regardless of their balance sheet ...ANNUAL REPORT 2007 44 Brand Strategy 2007: Noncurrent: Available-for-sale: Equity securities CSR Environmental Management 2007: Noncurrent: Available-for-sale: Equity securities Corporate...

  • Page 46
    ...-for-sale securities for the years ended March 31, 2005, 2006 and 2007. Effective October 1, 2005, UFJ Holdings, Inc. ("UFJ") and Mitsubishi Tokyo Financial Group, Inc. completed a merger, in which the UFJ shares of common stock owned by the Company were exchanged for shares of common stock of...

  • Page 47
    ... to amortization: Software Trade name and customer base Other Total Other intangible assets not subject to amortization Total other intangible assets $855,110 290,729 239,492 1,385,331 $(471,686) (129,542) (101,042) (702,271) $383,424 161,186 138,449 683,059 $694,280 ANNUAL REPORT 2007 46...

  • Page 48
    ... The future amortization expense for each of the next five years relating to intangible assets currently recorded in the consolidated balance sheets is estimated to be the following at March 31, 2007: Thousands of U.S. Dollars The changes in the carrying amounts of goodwill for the year ended March...

  • Page 49
    ...$(416,619) $ 303,263 ANNUAL REPORT 2007 48 Financial Section Brand Strategy CSR Environmental Management Corporate Governance Normal statutory tax rate Nondeductible expenses Tax benefits not recognized on operating losses of certain consolidated subsidiaries Utilization of net operating loss...

  • Page 50
    ...in the consolidated balance sheets as follows: Millions of Yen 2006 2007 Thousands of U.S. Dollars 2007 Deferred income taxes and other (Current Assets) Lease deposits and other (Non-current Assets) Accrued expenses and other (Current Liabilities) Deferred income taxes (Long-Term Liabilities) ¥40...

  • Page 51
    ...) $2,006,788 ANNUAL REPORT 2007 50 Financial Section Secured loans are collateralized by land, buildings and lease receivables with a book value of ¥3,186 million ($27,000 thousand) as of March 31, 2007. All bonds outstanding as of March 31, 2007 are redeemable at the option of Ricoh at 100% of...

  • Page 52
    ... PLANS The Company and certain of its subsidiaries have various contributory and noncontributory employees' pension fund plans in trust covering substantially all of their employees. Under the plans, employees are entitled to lump-sum payments at the time of termination or retirement, or to pension...

  • Page 53
    ... participants' contributions Settlement Benefits paid Foreign exchange impact Plan assets acquired in connection with business acquisition Fair value of plan assets at end of year Funded status Amounts recognized in the consolidated balance sheets as of March 31, 2007 consist of: ¥ 237,500 49,560...

  • Page 54
    ... the years ended March 31, 2005, 2006 and 2007 are as follows: 2005 2006 2007 Discount rate Rate of compensation increase Expected long-term return on plan assets 2.9% 5.3% 2.9% 3.0% 5.0% 3.2% 2.8% 5.4% 3.1% The net periodic benefit costs of the pension plans for the years ended March 31, 2005...

  • Page 55
    ...31, 2007. ANNUAL REPORT 2007 54 Financial Section Brand Strategy CSR Environmental Management Corporate Governance Common stock and bonds of the Company and certain of its domestic subsidiaries included in plan assets were immaterial at March 31, 2006 and 2007. Ricoh's investment policies and...

  • Page 56
    ...gains (losses) Minimum pension liability adjustments Other comprehensive income (loss) 2007: Foreign currency translation adjustments Unrealized gains (losses) on securities: Unrealized holding gains (...179) 128 (693) ¥24,774 132 (59) 73 (442) 257 (185) 970 ¥25,632 ¥ (540) 55 ANNUAL REPORT 2007

  • Page 57
    ...2007 Thousands of U.S. Dollars 2007 Ending balance Unrealized gains (losses) on securities: Beginning balance Change during the year Ending balance Unrealized gains (losses) on derivatives: Beginning balance Change during the year Ending balance Minimum pension...4,099 ANNUAL REPORT 2007 56 ...

  • Page 58
    ... 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...

  • Page 59
    ...254 thousand). Ricoh made rental payments totaling ¥39,000 million, ¥42,046 million and ¥40,722 million ($345,102 thousand) for the years ended March 31, 2005, 2006and 2007, respectively, under cancelable and noncancelable operating lease agreements for office space and machinery and equipment...

  • Page 60
    ... the summary of significant accounting policies, as discussed in Note 2. Ricoh's operating segments are comprised of Office Solutions, including copiers and related supplies, communications and information systems, Industrial Products, including thermal media and semiconductors, and Other, including...

  • Page 61
    ... 2,630 2,125 ¥85,800 $19,011,915 $614,110 72,712 22,288 18,008 $727,119 ANNUAL REPORT 2007 60 Financial Section Brand Strategy Total assets: Office Solutions Industrial Products Other Elimination Corporate assets ¥1,358,136 72,406 125,278 (10,174) 408,023 ¥1,426,635 84,595 114,925 (2,088...

  • Page 62
    ... on location of customers and long-lived assets by location for the years ended March 31, 2005, 2006 and 2007 are as follows: Millions of Yen 2006 Thousands of U.S. Dollars 2007 2005 2007 Sales: Japan The Americas Europe Other Consolidated Property, plant and equipment : Japan The Americas Europe...

  • Page 63
    ...Securities and Exchange Law, which a Japanese public company is subject to. Thousands of U.S. Dollars 2007 2005 2007 Sales: Japan External customers Intersegment Total The Americas External customers Intersegment Total Europe...915 $ Corporate Governance Business Strategy ANNUAL REPORT 2007 62 ...

  • Page 64
    ... On June 1, 2007, Ricoh and IBM Corporation ("IBM") completed formation of a joint venture company based on IBM's Printing Systems Division to provide output solutions for production printing area. Initially, Ricoh acquired 51% of the joint venture. Ricoh will progressively acquire the remaining 49...

  • Page 65
    ... an independent registered public accounting firm, has issued an audit report on our assessment of the effectiveness of Ricoh's internal control over financial reporting as of March 31, 2007. Shiro Kondo President and Chief Executive Officer Zenji Miura Corporate Executive Vice President and Chief...

  • Page 66
    Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Ricoh Company, Ltd.: We have audited the accompanying consolidated balance sheets of Ricoh Company, Ltd. (a Japanese corporation) and subsidiaries as of March 31, 2006 and 2007, and the related ...

  • Page 67
    ...have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Ricoh Company, Ltd. and subsidiaries as of March 31, 2006 and 2007, and the related consolidated statements of income, shareholders' investment and cash...

  • Page 68
    ... disclosed to the public through various media, including websites. Based on these principles, Ricoh Group companies have independently established and managed their own rules regarding the environment according to their business type. Corporate Philosophy Ricoh Group Environmental Principles Love...

  • Page 69
    ... laws and the rules of international conduct. Integrity in Corporate Activities 1. Every company in the Ricoh Group will develop and provide useful products and services, with high quality, safety, reliability and ease of use, while maintaining security of information and giving proper consideration...

  • Page 70
    ... Industry Ltd. Ricoh Component (H.K.) Ltd. India NRG Scandinavia AB Switzerland Ricoh India Limited Malaysia Ricoh Electronics, Inc. Sales and Other Argentina Lanier (Schweiz) AG United Kingdom Ricoh (Malaysia) Sdn. Bhd. New Zealand Ricoh Austria GmbH NRG Gestetner Austria GmbH Belgium Ricoh...

  • Page 71
    ...Toshiaki Katayama Kunihiko Satoh Thomas Salierno President and CEO Shiro Kondo Directors Koichi Endo Masayuki Matsumoto Katsumi Yoshida Takashi Nakamura Kazunori Azuma Zenji Miura Kiyoshi Sakai Takaaki Wakasugi Takuya Goto Corporate Executive Vice Presidents Koichi Endo Masayuki Matsumoto Katsumi...

  • Page 72
    Corporate Data Ricoh Company, Ltd. Corporate Headquarters Ricoh Building, 8-13-1 Ginza, Chuo-ku, Tokyo 104-8222 Japan Tel: +81-3-6278-2111 Fax: +81-3-6278-2997 Date of Establishment February 6, 1936 Number of Shares Authorized 1,500,000,000 shares Number of Shares Issued (as of March 31, 2007) ...

  • Page 73
    ...Road, Shanghai, China Phone: +86-21-5238-0222 Facsimile: +86-21-5238-2070 http://www.ricoh.com.cn/ Ricoh Company, Ltd. IR Department, Corporate Communication Center Ricoh Building, 8-13-1 Ginza, Chuo-ku, Tokyo 104-8222 Japan Phone: +81-3-6278-5254 Facsimile: +81-3-3543-9329 e-mail [email protected]...