Ricoh 2007 Annual Report Download - page 55

To Our Shareholders and
Customers
Highlights
Corporate Governance Business Strategy
CSR
Environmental Management
Financial Section Brand Strategy
54
ANNUAL REPORT 2007
13. SHAREHOLDERS’ INVESTMENT
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 strategies for the pension benefits do
not use target allocations for the individual asset categories. Ricoh’s
investment goals are to maximize returns subject to specific risk
management policies. Its risk management policies permit
investments in mutual funds and debt and equity securities and
prohibit direct investment in derivative financial instruments. Ricoh
addresses diversification by the use of mutual fund investments whose
underlying investments are in domestic and international fixed income
securities and domestic and international equity securities. These
mutual funds are readily marketable and can be sold to fund benefit
payment obligations as they become payable.
Ricoh uses a December 31 measurement date for the pension plans.
Ricoh expects to contribute ¥13,990 million ($118,559 thousand) to its
pension plans for the year ending March 31, 2008. The estimated net
actuarial loss, prior service cost and net asset at transition for Ricoh’s
pension fund plans that will be amortized from accumulated other
comprehensive income (loss) into net periodic pension cost over the
next fiscal year are ¥3,666 million ($31,068 thousand), ¥(3,906)
million ($(33,102) thousand) and ¥(82) million ($(695) thousand),
respectively.
The following benefit payments, which reflect expected future service,
as appropriate, are expected to be paid:
Thousands of
Years ending March 31 Millions of Yen U.S. Dollars
2008 ¥18,520 $156,949
2009 19,077 161,670
2010 20,158 170,831
2011 19,013 161,127
2012 19,313 163,670
2013– 2017 104,154 882,661
Employees of certain domestic subsidiaries not covered by the
employee's pension fund (“EPF”) plan are primarily covered by
unfunded retirement allowances plans. The retirement allowances
system for executives of the Company, fixed remuneration, which had
applied to Directors and Corporate Auditors, was abolished at the
closing of the 107th Ordinary General Meeting of Shareholders held on
June 27, 2007. On the abolishment, the Company will pay incumbent
Directors and Corporate Auditors final retirement allowances
corresponding to their tenures through the above Ordinary General
Meeting of Shareholders in accordance with the standards prescribed by
the Company.
The Corporation Law of Japan provides that an amount equal to 10% of
cash dividends and other distributions from retained earnings paid by
the Company and its domestic subsidiaries be appropriated as an
additional paid-in capital or legal reserve. No further appropriation is
required when the total amount of the additional paid-in capital and
legal reserve equals to 25% of common stock. Certain foreign
subsidiaries are also required to appropriate their earnings to legal
reserves under the laws of the respective countries. Legal reserves
included in retained earnings as of March 31, 2006 and 2007 were
¥17,156 million and ¥17,318 million ($146,763 thousand),
respectively, and are restricted from being used as dividends.
The Corporation Law of Japan requires a company to obtain the
approval of shareholders for transferring on amount between common
stock and additional paid-in capital. The Law also permits a company
to transfer an amount of common stock or additional paid-in capital to
retained earnings in principle upon approval of shareholders.
Semiannual cash dividends are approved by the shareholders after the
end of each fiscal period or are declared by the Board of Directors after
the end of each interim six-month period. Such dividends are payable
to shareholders of record at the end of each such fiscal or interim six-
month period. At the Ordinary General Meeting of Shareholders held
on June 27, 2007, the shareholders approved the declaration of a cash
dividend (¥15 per share) on the common stock totaling ¥10,950
million ($92,797 thousand), which would be paid to shareholders of
record as of March 31, 2007. The declaration of this dividend has not
been reflected in the consolidated financial statements as of March 31,
2007.
The amount of retained earnings legally available for dividend
distribution is that recorded in the Company’s non-consolidated books
and amounted to ¥407,599 million ($3,454,229 thousand) as of March
31, 2007.