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, 2003
Commission File Number 2 - 68279
RICOH COMPANY, LTD.
-----------------------------------------------
(Translation of Registrant's name into English)
15-5, Minami-Aoyama 1-Chome, Minato-ku, Tokyo 107-8544, Japan
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(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 X 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 X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-__ )
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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)
By: /S/ Etsuo Kobayashi
------------------------------
Etsuo Kobayashi
Senior Vice President
General Manager of
Personnel Division
June 9, 2003
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-June 5, 2003
NOTICE OF 103RD ORDINARY GENERAL MEETING OF SHAREHOLDERS
DEAR SHAREHOLDER,
Ricoh Company, Ltd. will hold its 103rd ordinary general meeting of
shareholders, which we cordially invite you to attend.
If you cannot be there, you can exercise your voting right in writing or through
the Internet (at http://www.web54.net). In that case, please peruse the attached
documents and exercise your right by Wednesday, June 25, 2003.
1. Date and time of Thursday, June 26, 2003, from 10:00 a.m.
gathering:
2. Venue: Ricoh's registered head office: 3-6,
Nakamagome 1-chome, Ohta-ku, Tokyo
3. Meeting agenda:
. Reporting The Balance Sheets as of March 31, 2003,
The Statements of Income for fiscal 2003
(April 1, 2002, through March 31, 2003),
and the Business Report for that period
. Resolutions
Agenda 1: Approval of the proposed appropriation of
retained earnings for fiscal 2003
Agenda 2: Acquisition of treasury stock
An outline of this proposal is on page
18, Documents for Reference in Exercising
Voting Rights
Agenda 3: Partial change to Articles of
Incorporation
An outline of this proposal is on pages
18 through 19, Documents for Reference in
Exercising Voting Rights
Agenda 4: Election of three (3) directors
Agenda 5: Election of two (2) Corporate Auditors
Request: When attending the meeting, please fill out and submit to reception the
appended voting form.
Masamitsu Sakurai, President
Ricoh Company, Ltd.
3-6, Nakamagome 1-chome, Ohta-ku, Tokyo
1
BUSINESS REPORT
(April 1, 2002, to March 31, 2003)
1. OPERATING CONDITIONS
(1) OPERATING PROGRESS AND RESULTS
(A) OVERVIEW
Fiscal 2003, ended March 31, 2003, was yet another very difficult year. It was
still impossible to see signs of a Japanese economic turnaround amid concerns
about prospects for the United States and other economies around the world and
stagnant share prices. While the American economy remained strong in the first
half of the year, the picture became cloudy in the second half amid slowing
personal consumption and deteriorating business conditions. European economies
were generally slow. In contrast, the Chinese economy continued to expand
solidly on growing domestic demand and higher exports.
Against this backdrop, the Ricoh Group pursued its vision of being a winner in
the 21st century. Under that banner, we aim to continue to provide high
reliability and build new value so that we can contribute to productivity
improvement and knowledge creation for individuals working anytime, anywhere,
providing high reliability and new value creation. Our proactive approach covers
not only products and services for traditional office setups but also customers
working at any time and place in a broadband environment.
Our three-year 14th medium-term management plan, which ends in March 2005, has
five basic objectives:
i. Realize a vital and motivated culture
ii. Strengthen technologies to become the world's No. 1 product-engineering
company
iii. Build a customer-friendly and environmentally friendly company
iv. Strengthen each business unit and revolutionize the Group business
structures
v. Strengthen management constitution for competitive advantage
We are meeting the challenges of digital networking in our core competence of
office equipment. We have accordingly endeavored since our 13th medium-term
management plan to not only manufacture such equipment as copiers and printers
but also overhaul our operational structure to help our customers improve or
enhance productivity through our offerings.
In the years ahead, demand should continue to rise for productivity enhancement.
At the same time, further advances in digital networking will generate greater
reliance on color-based documents and expand the amount of information, making
it increasingly critical for customers to more efficiently manage their Total
Document Volume (TDV) from copiers and printers.
Our 14th medium-term management plan thus focuses on building TDV (which
includes increasing added value per page) and thereby broadening our revenues
and earnings base. Our basic strategy has three goals:
i. Replacing monochrome products with color models
Provide a full lineup of compact color machines at prices comparable to those of
monochrome models, thus securing new markets by meeting new demand for color.
ii. Expanding sales of high-speed models
Attract more customers through fast machines providing competitive
advantages in terms of purchase price, maintenance charges, and
reliability.
iii. Deploying printing solutions
Suggest ways for customers to optimize the total output costs of their
copiers and printers, thus expanding equipment sales and building total
document volume.
Following are Ricoh's major basic strategic achievements in fiscal 2003.
In terms of replacing monochrome products with color models, the Company
continued to win top marks in Japan and abroad for its IPSiO Color 8000 series
(Aficio AP 3800C overseas) of fast color laser printers, which deliver color
performance at monochrome speed and price. During the term, we released the
Imagio Neo C240/C320 series of multifunctional printers (MFPs) for regular
offices, which helped expand our share of the domestic color copier market. We
also started selling this series overseas as the Aficio 1224C/1232C.
In high-speed models, the Imagio MF105Pro (Aficio 1050 overseas) digital copier
was very well received domestically and abroad for its affordable pricing and
maintenance fees and reliability. This machine attracted more customers seeking
high-volume copying and output.
We continued to make progress in printing solutions. In the European and U.S.
markets in particular, we drew on a global service and support structure that
optimizes total printing costs for copiers and printers to steadily increase the
number of major accounts worldwide.
During the term, we established Ricoh China Co., Ltd., as a holding company to
broaden our operations in the highly promising Chinese market. Ricoh has already
achieved impressive results to date in China, and the new subsidiary is
strategically expanding our business by integrating sales, production, and
development.
Ricoh is striving to bolster its technological capabilities to become the
world's No. 1 product-engineering company, providing the most competitive
products and services. Specific focuses include technologies to develop
next-generation, high-speed color imaging equipment and designing and developing
hardware and software that allow users to freely and simply connect and operate
various office machines. We are also pursuing the creation of environmentally
friendly offerings. In the year under review, we set up four research centers
within the Research and Development Division to support the development of basic
technologies, including one specializing in photonics and another concentrating
on environmental technologies. We also established operations within the
Software Research and Development Division.
During the term, we decided to make Tohoku Ricoh Co., Ltd., a wholly owned
subsidiary. This was in line with our goal of reinforcing Group development and
design capabilities to ensure an integrated strategic approach while delivering
cost-competitive offerings.
2
In fiscal 2003, nonconsolidated domestic sales were down 6.5%, while exports
rose 8.4%. As a result, net sales dropped 0.6%, to Yen 855.0 billion.
Operating income rose 2.8%, to Yen 71.8 billion, while ordinary income
increased 1.8%, to Yen 68.8 billion, on the strength of cost reductions and
a shift to high-value-added products. Net income improved 7.0%, to a record
Yen 42.8 billion.
(B) SEGMENT PERFORMANCE
SALES BY CATEGORY
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Category Main Products Sales Percentage Change
(Billions of yen) of Total
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Imaging Solutions Digital PPCs, color PPCs, digital 474.9 55.5% -8.5%
duplicators, Facsimile machines, analog
PPCs, diazo copiers, supplies and services,
and thermal paper
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Network Input/Output Systems Multifunctional printers (MFPs), printers 237.7 27.8% 26.0%
and other equipment, supplies, service, and
software, and optical discs and systems and
scanners
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Network System Solutions Personal computers, servers, network 89.6 10.5% -10.6%
systems, networking software, applications
software, and services and support
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Office Equipment Total - 802.3 93.8% -0.7%
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Other Businesses Including photographic equipment and 52.7 6.2% 1.1%
semiconductors
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Total - 855.0 100.0% -0.6%
===================================================================================================================================
Domestic - 484.1 56.6% -6.5%
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Exports - 370.8 43.4% 8.4%
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Note: Until fiscal 2002, the Company maintained four categories, which were
Copiers and Related Supplies, Communications and Information Systems,
Photographic Equipment, and Other Businesses. The above categories came
into effect from fiscal 2003. Accordingly, the Company has calculated year
on year changes on the basis of the new categories.
OFFICE EQUIPMENT
To support customers more efficiently manage their TDV, the Ricoh Group
offers solution proposals for these customers to optimize their total
printing costs. To realize this business target, Ricoh is pushing ahead with
digitization, networking, colorization, and multifunctionality. As a result
of these efforts, sales of imaging solutions, which focus on standalone
equipment, were down 8.5% from a year earlier, to Yen 474.9 billion. In
contrast, sales of network input/output solutions rose 26.0%, to Yen 237.7
billion, reflecting the popularity of MFPs and laser printers. Sales of
network system solutions declined 10.6%, to Yen 89.6 billion. This was
mainly because sales of personal computers and servers continued to decline
in Japan, reflecting sluggish information technology spending.
OTHER BUSINESSES
Here, sales were up 1.1%, to Yen 52.7 billion, on solid demand for the
Company's semiconductors overseas.
(2) PLANT AND EQUIPMENT INVESTMENT
In fiscal 2003, we invested Yen 18.3 billion in plant and equipment,
as follows:
(a) Major equipment and facilities expansions completed during the year:
Electronic components plant (Yashiro Plant)
Related supplies plant (Numazu Plant)
Related supplies plant (Fukui Plant)
(b) Major expansions in progress during the year:
Electronic components plant (Yashiro Plant)
Related supplies plant (Numazu Plant)
Related supplies plant (Fukui Plant)
(3) FUNDING
During the year, Ricoh neither raised capitalization nor procured
finance through the issue of corporate bonds or other instruments.
3
(4) SUMMARY OF NONCONSOLIDATED OPERATING RESULTS
(Billions of yen)
---------------------------------------------------------------------------------------------------------------------------
Year ended March 31, Year ended March 31, Year ended March 31, Year ended March 31,
2000 2001 2002 2003
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Net sales 777.5 855.4 860.1 855.0
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Ordinary income 50.1 65.9 67.6 68.8
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Net income 22.6 34.4 40.0 42.8
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Net income per share (yen) 32.69 49.67 57.42 58.75
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Total assets 763.0 824.1 908.0 933.3
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Shareholders' equity 457.9 489.1 553.6 596.6
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Notes:
1. Net income per share is based on the average number of shares of
common stock outstanding during the fiscal year.
2. From fiscal 2002, net income per share was calculated after deducting
the number of shares of treasury stock from the average number of
shares of common stock outstanding.
3. From fiscal 2003, the Company applied Accounting Standards for Net
Income per Share (Corporate Accounting Standard No. 2) and Policies
Applied to Accounting Standards Related to Net Income per Share
(Corporate Accounting Standard Application Policy No. 4) in
calculating net income per share.
2. PROFILE (AS OF MARCH 31, 2003)
(1) PRINCIPAL SALES OFFICES AND PLANTS
(a) Head office: 3-6, Nakamagome 1-chome, Ohta-ku, Tokyo
(b) Sales Offices:
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Name Location
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Principal Executive Office Minato-ku, Tokyo
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Ginza Office Chuo-ku, Tokyo
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Shinyokohama Office Yokohama, Kanagawa
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Sapporo Branch Sapporo, Hokkaido
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Sendai Branch Sendai, Miyagi
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Kanto Branch Saitama, Saitama
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Tokyo Branch Chuo-ku, Tokyo
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Nagoya Branch Nagoya, Aichi
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Osaka Branch Suita, Osaka
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Hiroshima Branch Hiroshima, Hiroshima
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Fukuoka Branch Fukuoka, Fukuoka
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(c) Laboratories and Plants:
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Name Location
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Research and Development Center Yokohama, Kanagawa
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Software Research Center Bunkyo-ku, Tokyo
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Applied Electronics Institute Natori, Miyagi
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Ohmori Office Ohta-ku, Tokyo
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Ohmori Office 2 Ohta-ku, Tokyo
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Atsugi Plant Atsugi, Kanagawa
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Hatano Plant Hatano, Kanagawa
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Gotemba Plant Gotemba, Shizuoka
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Numazu Plant Numazu, Shizuoka
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Fukui Plant Sakai-gun, Fukui
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Ikeda Plant Ikeda, Osaka
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Yashiro Plant Kato-gun, Hyogo
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(2) SHAREHOLDERS' EQUITY
(a) Total number of shares:
Authorized 993,000,000
Issued 744,912,078
(b) Number of shareholders at year-end: 45,620
4
(c) Major shareholders:
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Interest in Ricoh Ricoh's Interest in Shareholder
----------------------------------------------------------------------------------
Name Thousands of shares Percentage of Thousands of Percentage of
total shares total
------------------------------------------------------------------------------------------------------------------------------
Japan Trustee Services Bank, Ltd. (Trust 73,075 9.92% - -
Account)
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Mster Trust Bank of Japan, Ltd. (Trust 65,178 8.85% - -
Account)
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Nippon Life Insurance Company 31,692 4.30% - -
------------------------------------------------------------------------------------------------------------------------------
UFJ Bank, Ltd. 24,400 3.31% - -
------------------------------------------------------------------------------------------------------------------------------
The Bank of Tokyo-Mitsubishi, Ltd. 21,545 2.92% - -
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NIPONKOA Insurance Co., Ltd. 19,015 2.58% 55 0.01%
---------------------------------------------------------------------------------------------------------------------------
UFJ Trust Bank , Ltd. (Trust Account) 16,890 2.29% - -
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The New Technology 15,636 2.12% - -
Development Foundation
---------------------------------------------------------------------------------------------------------------------------
Mizuho Corporate Bank, Ltd. 14,278 1.93% - -
---------------------------------------------------------------------------------------------------------------------------
THE CHASE MANHATTAN BANK N.A. LONDONS.L. 11,666 1.58% - -
OMNIBUS ACCOUNT
---------------------------------------------------------------------------------------------------------------------------
Note: In addition to the above, stakes in the Company include 1,000,000
shares (0.13%) that NIPPONKOA Insurance Co., Ltd., owns and has entrusted
with the Master Trust Bank of Japan, Ltd. The Master Trust Bank of Japan,
Ltd., is the nominal owner, but NIPPONKOA Insurance Co., Ltd., reserves
the right to instruct on exercising voting rights on these shares.
(d) Acquisition, disposal, and ownership of shares of treasury stock:
1) Treasury stock acquired
Acquisitions based on resolution under Article 210-1 of the Commercial Code
Number of shares of common stock 8,000,000 shares
Acquisition cost Yen 15,038 million
Acquisitions through purchases of share packages less than one unit
(tan-gen)
Number of shares of common stock 1,111,925 shares
Acquisition cost Yen 2,242 million
2) Treasury stock disposed of
Number of treasury shares of common stock 7,000,000 shares
3) Number of treasury stocks at year-end
Number of treasury shares of common stock 2,303,443 shares
(3) EMPLOYEES
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Number of Employees Change from Previous Average Age Average Years of
Year Service
-----------------------------------------------------------------------------------------------------------------------------
Male 10,429 -66 41.7 19.0
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Female 1,656 -10 33.6 12.9
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Total 12,085 -76 40.6 18.1
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5
(4) DIRECTORS AND CORPORATE AUDITORS
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Position or Principal Duty Name
------------------------------------------------------------------------------------------------------------------------------
Chairman and Representative Director Hiroshi Hamada
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President and Representative Director Masamitsu Sakurai
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Deputy President and Representative Director Haruo Kamimoto
(SCM Structural Reform, CS & Quality, Environment, Social
Contribution, Public Relations, etc.)
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Deputy President and Representative Director Tatsuo Hirakawa
(Corporate Planning, IR, Accounting, Personnel, etc.)
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Executive Managing Director Naoto Shibata
(Legal Affairs, Intellectual Property, Corporate Social Responsibilities)
------------------------------------------------------------------------------------------------------------------------------
Executive Managing Director Kohichi Endo
(Production, Materials Procurement, and Information Technology Solutions; General
Manager of Production Business Division)
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Executive Managing Director Masami Takeiri
(Overseas Marketing; General Manager of International Marketing
Group)
------------------------------------------------------------------------------------------------------------------------------
Executive Managing Director Masayuki Matsumoto
(Domestic marketing and Ricoh Venture Program; General Manager
of Marketing Group)
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Managing Director Makoto Hashimoto
(Planning, Development, and Engineering of Personal Multimedia
System; President of Personal Multimedia Company)
------------------------------------------------------------------------------------------------------------------------------
Managing Director Katsumi Yoshida
(Sales in the Americas)
------------------------------------------------------------------------------------------------------------------------------
Managing Director Kiyoshi Sakai
(Research and Development; General Manager of Research and Development; Head of
Group Technology Planning Office; Head of New Business Promotion Center; Leader
of Alpha Taskforce)
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Director Josei Itoh
(Comprehensive Business Administration)
(Chairman and Representative Director of Nippon Life Insurance
Company)
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Director Nobuo Mii
(Information Communication Business and Technological Matters)
(Managing Partner of Ignite Group)
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Corporate Auditor (Full-time) Hisaaki Koga
------------------------------------------------------------------------------------------------------------------------------
Corporate Auditor (Full-time) Hideyuki Takamatsu
------------------------------------------------------------------------------------------------------------------------------
Corporate Auditor Kenji Matsuishi
(President of Matsuishi Law Office)
------------------------------------------------------------------------------------------------------------------------------
Corporate Auditor Takehiko Wada
(President and Representative Director of Sanai-oil Co., Ltd.)
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Notes:
1. In fiscal 2003, the Board of Directors changed as follows:
June 2002: Katsumi Yoshida and Kiyoshi Sakai were appointed as managing
directors.
2. Directors Josei Itoh and Nomuo Mii are external directors appointed
under Article 188-2-7 of the Commercial Code.
3. Corporate auditors Kenji Matsuishi and Takehiko Wada are outside
auditors as stipulated in Paragraph 1, Article 18 of the Law Concerning
the Special Measures Applicable to Auditing Practices under the
Commercial Code.
6
(5) STATUS OF CONSOLIDATION
(a) Major Consolidated Subsidiaries:
---------------------------------------------------------------------------------------------------------------------------------
Name Paid-in Capital (Millions of Percentage of Principal Businesses
yen, except where indicated) Total
---------------------------------------------------------------------------------------------------------------------------------
Tohoku Ricoh Co., Ltd. 2,272 66.14 Manufacturing copiers and
information equipment
---------------------------------------------------------------------------------------------------------------------------------
Ricoh Elemex Corporation 3,456 50.86 Manufacturing copiers and
information equipment
---------------------------------------------------------------------------------------------------------------------------------
NBS Ricoh Co., Ltd. 50 100.00 Marketing office supplies
---------------------------------------------------------------------------------------------------------------------------------
Tokyo Ricoh Co., Ltd. 418 100.00 Marketing copiers and
information equipment
---------------------------------------------------------------------------------------------------------------------------------
Ricoh Technosystems Co., Ltd. 1,000 100.00 Marketing information equipment and
maintaining copiers and information equipment
---------------------------------------------------------------------------------------------------------------------------------
Ricoh Kansai Co., Ltd. 700 100.00 Marketing copiers and
information equipment
---------------------------------------------------------------------------------------------------------------------------------
Ricoh Leasing Co., Ltd. 6,340 51.07 General leasing
---------------------------------------------------------------------------------------------------------------------------------
Ricoh Asia Industry Ltd. 180 90.00 Marketing copiers and
(Millions of Hong Kong dollars) information equipment
---------------------------------------------------------------------------------------------------------------------------------
Ricoh Electronics, Inc. 27 100.00 Manufacturing copiers and information
(Millions of U.S. dollars) equipment and manufacturing and marketing
office supplies
---------------------------------------------------------------------------------------------------------------------------------
Ricoh Corporation 192 100.00 Marketing copiers and information and
(Millions of U.S. dollars) photographic equipment
---------------------------------------------------------------------------------------------------------------------------------
Lanier Worldwide, Inc. 256 100.00 Marketing copiers and information equipment
(Millions of U.S. dollars)
---------------------------------------------------------------------------------------------------------------------------------
Ricoh Europe B.V. 13 100.00 Marketing copiers and information and
(Millions of euros) photographic equipment
---------------------------------------------------------------------------------------------------------------------------------
NRG Group Plc 49 100.00 Marketing copiers and information and
(Millions of pounds sterling) photographic equipment
---------------------------------------------------------------------------------------------------------------------------------
Note: The shareholding ratios in Tohoku Ricoh Co., Ltd., Ricoh Elemex
Corporation, Ricoh Leasing Co., Ltd., Ricoh Electronics, Inc., and
Lanier Worldwide, Inc., include shares owned by subsidiaries.
(b) Consolidations
There were no specific transfers of subsidiaries to mention. Tohoku Ricoh
Co., Ltd., became a wholly owned subsidiary following a share exchange on
April 1, 2003.
(c) Consolidation Results
In fiscal 2003, the Ricoh Group had 334 consolidated subsidiaries and 61
affiliates accounted for under the equity method. Consolidated results
were as follows:
(Billions of yen)
-------------------------------------------------------------------------------------------------------------------------------
Year ended March 31, Year ended March 31, Year ended March 31, Year ended March 31,
2000 2001 2002 2003
-------------------------------------------------------------------------------------------------------------------------------
Net sales 1,447.1 1,538.2 1,672.3 1,738.3
(Overseas) (573.9) (607.8) (769.6) (842.3)
-------------------------------------------------------------------------------------------------------------------------------
Income before income taxes, 70.3 97.7 113.9 123.4
minority interests, and equity
in earnings of affiliates
-------------------------------------------------------------------------------------------------------------------------------
Net income 41.9 53.2 61.6 72.5
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Net income per share (yen) 60.61 76.85 88.27 99.79
-------------------------------------------------------------------------------------------------------------------------------
Total assets 1,543.3 1,704.7 1,832.9 1,884.9
-------------------------------------------------------------------------------------------------------------------------------
Total shareholders' investment 541.5 556.7 633.0 657.5
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Notes:
1. The consolidated financial statements were prepared in conformity with
accounting principles generally accepted in the United States.
2. Net income per share is based on the average number of shares of common
stock during the period under review.
In fiscal 2003, ended March 31, 2003, consolidated net sales increased 3.9%, to
Yen 1,738.3 billion. This was the ninth consecutive rise.
Domestic sales were down 0.7%, to Yen 896.0 billion. On the positive side
sales increased for printing systems such as MFPs and laser printers. Sales were
also favorable for useware, document management, and other areas of the
solutions business. In contrast, sales of standalone analog equipment fell amid
the shift toward MFPs, while sales were off for personal computer and servers
due primarily to the sluggish domestic information technology demand. Sales
declined for measuring equipment as a result of slow demand cycle.
7
Overseas sales increased 9.4%, to Yen 842.3 billion. Sales were steady despite
an economic slowdown in the United States and the turmoil in the Middle East.
The Company continued to perform well in Europe, where the economic environment
stabilized, and in other areas. In terms of sales by product lines, sales of
core digital equipment increased solidly, while sales of strategic focused
printing systems increased significantly in Europe and the United States.
Optical disc and semiconductors operations enjoyed favorable sales.
Gross profit increased 6.5%, to Yen 745.3 billion. In both Japan and abroad,
sales were up for high-margin, high-value-added products, notably MFPs and laser
printers. Ongoing cost reductions also contributed to performance, while the
yen's depreciation against the euro also affected operations. The Company
incurred additional costs owing to cover quality problems on some metering
equipment.
Selling, general and administrative expenses increased 7.3%, to Yen 611.6
billion, reflecting strategic spending on research and development and on basic
systems development.
As a result of the above factors, operating income increased 3.1%, to Yen
133.6 billion.
Interest and dividend income decreased due primarily to sluggish financial
markets. On the other hand, foreign exchange losses fell, while the Company
constrained interest-bearing debt by reinforcing cash management systems in
Japan, the United States, and Europe. Ricoh valued its holdings of marketable
securities appropriately in accordance with generally accepted accounting
principles. As the result, income before income taxes, minority interests and
equity in earnings of affiliates increased 8.4%, to Yen 123.4 billion.
Net income thus surged 17.7%, to Yen 72.5 billion, the 11th consecutive
increase and the ninth consecutive record high.
3. CHALLENGES
Economic prospects remain unclear in the United States, which drives the global
economy. At the same time, the Japanese equity markets remain in the doldrums,
and we estimate that the global economy will continue to suffer low growth. On
top of that, competition is very intense in the color and digital networking
fields.
The Ricoh Group's prime priorities in continuing to achieve growth in such a
tough operating environment are to create new customer value while further
improving management efficiency, thereby bolstering corporate competitiveness.
It is critical for us to become the world's No. 1 product-engineering company so
we can identify new needs and provide superior value. To that end, we will
redouble efforts to provide new value through out customer satisfaction-oriented
management while solidifying our technological clout so we can deliver new value
through our products and services.
In building and providing such value, Ricoh aims to meet its goals of being
people-friendly and environmentally friendly. In other words, we are pursuing
ease of use so customers can take full advantage of products and services that
are becoming increasingly complex as digital networking progresses. We are also
endeavoring to reinforce our environmental management as part of our mission
without compromising profitability.
We are making steady progress in streamlining efficiency through process reforms
in all Group fields as part of a drive to improve capital efficiency and
earnings. In addition, we aim to slash costs and thereby raise price
competitiveness, thus realizing a low-cost management structure that can provide
high efficiency in deflationary environments.
It is also a most important management challenge to prevent the sorts of
scandals that have occurred in Japan and abroad recently that have shaken
community trust.
The Group is addressing this issue in line with its commitment to its
responsibilities as a member of society, striving to serve the interests of its
customers and other stakeholders while strengthening its management
organization.
4. SUBSEQUENT EVENTS
The Company and Tohoku Ricoh Co., Ltd., agreed at their respective boards of
directors held on December 17, 2002, the Company making Tohoku Ricoh a wholly
owned subsidiary through a share exchange, after which share exchange contracts
were concluded. The exchange was in accordance with the provisions of Paragraph
1 of Article 358 (Simplified Share Exchange) of the Commercial Code of Japan,
and was effective on April 1, 2003. The allocation ratio was 0.345 shares of
Ricoh stock per share of Tohoku Ricoh stock. Ricoh's treasury stock purchased
prior to this transaction was used for the shares to be allocated for this share
exchange, in accordance with Article 210 of the Commercial Code of Japan.
8
BALANCE SHEETS
(As of March 31)
(Millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
Fiscal 2003 Fiscal 2002 Fiscal 2003 Fiscal 2002
------------------------------------------------------------------------------------------------------------------------------------
Assets Liabilities
------ -----------
Current Assets: Current Liabilities:
Cash and time deposits 8,951 5,976 Notes payable-trade 6,822 6,944
Notes receivable-trade 6,287 8,805 Accounts payable-trade 100,348 97,242
Accounts receivable-trade 170,349 178,421 Convertible bonds maturing within one - 29,886
Marketable securities 132,096 170,847 year
Finished goods 20,711 23,530 Accounts payable-other 7,791 5,648
Raw materials 3,397 3,446 Accrued expenses 44,789 44,622
Work-in-process 5,572 7,115 Accrued corporate tax and other 19,375 14,658
Supplies 5,680 6,156 Reserve for accrued bonuses 15,838 17,131
Short-term loans receivable 3,323 3,286 Warranty reserve 202 333
Deferred tax assets 19,417 15,646 Other current liabilities 6,090 9,022
Accounts receivable-other 119,481 127,412 Total Current Liabilities 201,259 225,489
Other current assets 3,934 3,846
Allowance for doubtful accounts -1,049 -1,594 Long-term Liabilities:
Total Current Assets 498,155 552,898 Bonds 100,000 100,000
Accrued pension and severance costs 34,507 28,068
Reserve for directors' retirement 879 758
Fixed Assets: allowances
Property, Plant and Equipment: Total Fixed Liabilities 135,387 128,826
Buildings 41,408 43,872 Total Liabilities 336,646 354,315
Structures 1,797 1,937
Machinery and equipment 18,914 19,713 Shareholders' Equity
--------------------
Vehicles and delivery equipment 17 20 Common Stock 135,364 120,461
Tools, instruments and fixtures 17,898 18,748
Land 24,478 24,476 Capital Surplus:
Construction in progress 2,669 676 Additional paid-in-capital 176,131 161,227
Total Tangible Fixed Assets 107,183 109,445 Total Capital Surplus 176,131 161,227
Retained Earnings:
Legal reserve 14,955 14,955
Intangible Assets: Reserve for deferral of capital gain 613 681
Premium and others 9,438 9,392 on property
Software 11,907 9,179 Reserve for special depreciation 486 650
Total Intangible Fixed Assets 21,346 18,572 Reserve for warranty on computer 255 254
programs
Reserve for corporate citizenship 119 140
promotion
Investments and Other Assets: General reserve 241,350 211,350
Investment securities 76,143 32,652 Unappropriated retained earnings 30,248 40,790
Stock of subsidiaries 126,622 125,295 [Net income for the period] (42,880) (40,085)
Investment in subsidiaries 18,158 13,479 Total Retained Earnings
Long-term loans receivable 55,482 29,567
Deferred tax assets 23,721 18,086
Guarantee deposits paid 5,709 5,749 Unrealized holding gains on 1,556 3,615
Other investments 3,595 4,713 available-for-sale securities
Allowance for doubtful accounts -2,777 -2,451
Total Investments and Other Assets 306,655 227,092 Treasury stock -4,386 -433
Total Fixed Assets 435,186 355,111 Total Shareholders' Equity 596,694 553,693
----------------------------------------------------------------------------------------------------------------------------------
Total Assets 933,341 908,009 Total Liabilities and Shareholders'
Equity 933,341 908,009
----------------------------------------------------------------------------------------------------------------------------------
9
STATEMENTS OF INCOME
(For the years ended March 31)
(Millions of yen)
----------------------------------------------------------------------------------------------
Fiscal 2003 Fiscal 2002
----------------------------------------------------------------------------------------------
Ordinary Income and Loss
Operating income and expenses
Operating income:
Net sales 855,024 860,149
Operating expenses:
Cost of sales 584,539 593,837
Selling, general and administrative expenses 198,628 196,400
Total operating expenses 783,167 790,237
Operating income 71,856 69,911
Non-operating income and expenses
Non-operating income:
Interest and dividends income 7,251 8,997
Other income 4,110 5,678
Total non-operating income 11,361 14,676
Non-operating expenses:
Interest expenses 1,527 1,232
Other expenses 12,792 15,666
Total non-operating expenses 14,319 16,898
Ordinary income 68,898 67,688
Income before income taxes 68,898 67,688
Corporate tax, inhabitants tax and enterprise tax 33,880 31,100
Deferred income tax -7,862 -3,497
Net income 42,880 40,085
Retained earnings at beginning of year 5,703 4,809
Reversal of reserve for corporate citizenship promotion 81 59
Retirement of Treasury stocks 13,328 -
Interim cash dividends 5,088 4,163
Unappropriated retained earnings at end of year 30,248 40,790
----------------------------------------------------------------------------------------------
10
I. SIGNIFICANT ACCOUNTING POLICIES
1. Valuation method for securities
(1) Stocks of subsidiaries and affiliates
Securities of subsidiaries and affiliates are stated at moving average
cost.
(2) Other securities
-Marketable securities: Marketable securities are 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 capital
injection method; the cost of securities
sold is valued at moving average cost).
- Non-marketable securities: Non-marketable securities are stated at
cost based on the moving average method.
2. Valuation method for inventories
Inventories are stated at the lower of average cost.
3. Valuation standards and methods for derivatives
Derivatives are stated at market value.
4. Depreciation and amortization
(1) Property, Plant and Equipment
Depreciation of property, plant and equipment is computed
principally by using the declining-balance method. However
buildings (excluding fixtures) acquired after April 1, 1998, are
depreciated using the straight-line method. The depreciation
periods are basically as the below;
Buildings: 5-50 years
Machinery and equipment: 2-12 years
(2) Intangible Assets
Amortization of intangible asset is computed by using the
straight-line method.
With software for sale in the marketplace, however, the Company
records the larger of a depreciation based on projected sales
profits or a uniform depreciation based on a projected effective
sales period for the balance. The initially projected effective
sale term is three years. With software for internal use, the
Company uses straight-line depreciation based on a usable period
of five years.
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 irrecoverability.
(2) Reserve for 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) Warranty reserve
To cover product after-sales service expenses, the Company calculates the
product warranty reserve based on projected service costs during warrantee
terms.
(4) Accrued pension and severance costs
To cover projected employee benefits, the Company records the estimated
obligations at the end of the current fiscal year based on projected
year-end benefit obligations and plan assets. Amortization of actuarial
gains or losses is computed by the straight-line method over the averaged
remaining employment term (15 years). Amortization of prior service cost
is computed by the straight-line method over the averaged remaining
employment term (15 years).
(Additional information)
On January 1,2003, the Company obtained an approval for the exemption from the
future benefit obligation of the Japanese government of the substitute portion
in accordance with new law concerning the defined benefit plan. The Company has
not adopted transitional measure as set forth in the "Practice Guideline
Concerning Retirement Benefit Accounting (Interim Report)"(Report of the
Accounting Standards Committee of The Japanese Institute of Certified Public
Accountants No. 13), Item 47-2. The effect of the transitional measure as set
forth in this Practice Guideline, Item 47-2 is expected to increase extra
ordinary gain by Yen 13,146 million.
(5) Reserve for Directors' Retirement Allowances
At year-end, Ricoh calculates the amounts required under internal rules to
pay directors retirement allowances, in compliance with Article 287-2 of
the Commercial Code prior to the changes of 2002.
6. Consumption Taxes
Consumption taxes are excluded from revenues and expenses.
7. Leasing
Finance leases for which ownership does not transfer to lessees are
accounted for as operating leases.
8. Hedge accounting
(1) Hedge Accounting Methods
Ricoh accounts for hedges at market value. With currency swaps, however,
the Company hedges by assigning transactions that meet assignment
requirements.
(2) Hedging Instruments and Targets
There is no Hedging Instrument or Hedging Target at the end of current
fiscal year.
11
(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
Ricoh assesses the effectiveness of hedges by analyzing the ratios of the
total market fluctuations of hedged targets and instruments.
9. Accounting standard regarding treasury stock and reduction of legal reserve
The company adopted "Accounting standard regarding treasury stock and
reduction of regal reserve" (Accounting Standard No. 1) from fiscal 2003.
The new standard had immaterial effect on results of operations.
Accounting in shareholders' investment is in compliance with the
implementation regulations of the Commercial Code prior to the 2003
revision (Finance Ministry ordinance 22 of March 29, 2002).
10. Earnings per share
The company adopted "Accounting standard for earning per share"
(Accounting Standard No. 2) and "Application guideline for accounting
standard for earnings per share" (Application guideline for accounting
standard No. 4) from fiscal 2003. Earnings per share calculated under the
method used in the previous fiscal year were Yen 59.01.
12
II. NOTES TO BALANCE SHEETS
1. Short-term receivable due from subsidiaries Yen 245,668 million
Long-term receivable due from subsidiaries Yen 55,868 million
2. Short-term payable due to subsidiaries Yen 43,719 million
3. Accumulated depreciation on tangible fixed assets Yen 319,167 million
4. Assets and liabilities denominated in foreign currency
Accounts receivable-trade: Yen 84,299 million (US$417,646 thousand; EURO
262,647 thousand, etc.) Stocks of subsidiaries: Yen 108,677 million
(Pounds 282,610 thousand; US$308,585 thousand, etc.) Investments in
subsidiaries: Yen 17,934 million (EURO 122,411 thousand, etc.)
5. Guarantee obligation Yen 1,115 million
6. Trade notes receivable discounted with banks Yen 47 million
7. Shares of common stock issued and outstanding at year-end: 744,912,078
shares (common stock)
Shares of treasury stock held at year-end: 2,303,443 shares (common stock)
8. Net income per share Yen 58.75
(Basis for calculation)
Net income Yen 42,880 million
Money not distributable among shareholders of common stock: Yen - 183 million
Net income distributable among shareholders of common stock: Yen 42,697 million
Average number of shares outstanding during fiscal year (after deducting treasury stock):
726,659,698 shares
9. In addition to the fixed assets stated in the balance sheet, the Company
uses computer and electronic component manufacturing facilities under
lease agreements.
10. Net worth as prescribed in the sixth paragraph of Article 290-1 of the
Commercial Law Yen 1,556 million
11. Tax Effect Accounting
The prime components of deferred tax assets and liabilities are as
follows:
(Millions of yen)
--------------------------------------------------------------------------
Deferred tax assets:
Inventory revaluation 2,239
Accrued bonus 5,397
Accrued enterprise tax 1,883
Retirement benefit obligation 21,251
Depreciation and amortization 1,958
Other 18,266
Total deferred tax assets 50,994
--------------------------------------------------------------------------
(Millions of yen)
--------------------------------------------------------------------------
Deferred tax liabilities:
Reserve for deferral of capital gain on
property -408
Reserve for special depreciation -339
Reserve for warranty on computer programs -207
Net unrealized holding gains on securities -1,060
Retirement benefit trust establishment -5,842
Total deferred tax liabilities -7,856
--------------------------------------------------------------------------
(Millions of yen)
--------------------------------------------------------------------------
Net deferred tax assets 43,138
Included in current assets 19,417
Included in investment and other assets 23,721
--------------------------------------------------------------------------
III. NOTES TO STATEMENTS OF INCOME
1. Sales to subsidiaries Yen 714,129 million
2. Purchases from subsidiaries Yen 278,146 million
3. Non-operating transactions with subsidiaries Yen 558,195 million
Transfer of assets Yen 386,744 million
Transfer of liabilities Yen 162,519 million
Others Yen 8,932 million
4. Difference in normal effective statutory tax rate and effective tax rate
after applying tax effective accounting
Normal effective statutory tax rate 41.9%
(Reconciliation)
Permanently non-deductible expenses 0.3%
Permanently non-taxable income -0.7%
Tax credit for foreign taxes -0.7%
Tax credit for increased research and development
expenses -1.8%
Effect of change in enacted tax rate 1.2%
Other -2.4%
--------
Effective tax rate 37.8%
13
5. The Local Tax Law has been amended and enacted, the and pro forma standard
taxation will be effective from April 1, 2004. The statutory tax rate used
to calculate current deferred tax assets and liabilities, based on
temporary differences eliminated by March 31, 2003, was the rate before
the amendment, and for long-term deferred tax assets and liabilities
eliminated after April 1, 2004, was the rate after the amendment. Due to
the tax rate change, deferred tax assets (net of deferred tax liabilities)
decreased Yen 803 million, while deferred taxes expensed during the fiscal
year increased Yen 838 million and the unrealized holding gains on
available-for-sale securities increased Yen 35 million.
IV. RETIREMENT ALLOWANCE PLANS
1. Explanation of retirement allowance plan adopted:
The Company maintains a lump-sum retirement payments as part of its
retirement allowance payments, which includes a qualified pension plan
based on deposits. Payable allowances under the plan are determined by
salary at retirement, years of service, and reasons for retirement. The
Company also maintains an employees' pension fund (adjusted pension) plan
based on the Welfare Pension Insurance Law. The employees' pension fund
plan consists of two portions: the basic portion is deposited by the
company and the employee, where the company plays a part in the public
pension system; and an additional portion. The additional pension is
determined by the years of service and the salary at retirement. The
Company maintains an employee retirement allowance trust.
2. Retirement allowance obligations: (As of March 31, 2003)
Benefit obligation: Yen 303,863 million
---------------------
(1) Plan assets: Yen 143,277 million
(2) Accrued pension and severance costs: Yen 34,507 million
-------
(3) Unrecognized net actuarial loss: Yen 145,267 million
(4) Unrecognized prior service cost -Yen 19,189 million
(obligations reduction):
3. Breakdown of the net periodic benefit costs: (For the year ended
March 31, 2003)
The net periodic benefit costs: Yen 15,200 million
(1) Service costs: Yen 8,466 million
(2) Interest costs Yen 7,915 million
(3) Expected return on plan assets: -Yen 5,269 million
(4) Amortization of actuarial loss: Yen 4,896 million
(5) Amortization of prior service cost -Yen 807 million
4. Actuarial assumptions:
(1) Discount rate: 2.2%
(discount rate applied to calculations (3.0%)
at beginning of the year)
(2) Expected long-term rate of return on 3.0%
plan assets:
(3) The attribution of cost method: Fixed-term basis
(4) Years for adjusting actuarially: 15 years
(5) Years for expensing past service 15 years
obligations
5. Relationship between reserve for retirement allowance, offset against
retirement allowance trust and pension assets: The reserve for retirement
allowances at year-end under the qualified pension plan was Yen 14,779
million; there were no offsetting pension assets under the retirement
allowance trust. The reserve for retirement allowances at year-end under
the employees' pension fund plan was Yen 19,728 million; the offsetting
pension assets under the retirement allowance trust were Yen 21,622
million.
14
PROPOSED APPROPRIATION OF RETAINED EARNINGS
(Yen)
-------------------------------------------------------------------------------------------------
Fiscal 2003 Fiscal 2002
-------------------------------------------------------------------------------------------------
Unappropriated retained earnings at end of year 30,248,567,126 40,790,892,233
Reversal of reserve for deferral of capital
gain on property 27,478,909 67,594,743
Reversal of reserve for special depreciation
104,573,744 183,523,126
Reversal of reserve for warranty on computer
programs 91,806,833 135,194,191
Total 30,472,426,612 41,177,204,293
-------------------------------------------------------------------------------------------------
To be appropriated as follows:
(Yen)
-------------------------------------------------------------------------------------------------
Cash dividends 5,198,260,445 5,089,607,166
(Yen 7.00 per share)
Director bonuses 183,400,000 170,000,000
Reserve for deferral on capital gain on property 14,137,521 -
Reserve for special depreciation 118,240,207 18,998,737
Reserve for warranty on computer programs 141,070,970 136,468,721
Reserve for corporate citizenship promotion 81,000,000 59,100,000
General reserve 19,000,000,000 30,000,000,000
Retained earnings brought forward to the next
year 5,736,317,469 5,703,029,669
-------------------------------------------------------------------------------------------------
Notes:
1. On December 2, 2002, the Company made interim cash dividends of Yen 7.00
per share totaling Yen 5,088,433,770.
2. Increases in the Reserve for deferral on capital gain on property, the
Reserve for special depreciation, and the Reserve for warranty on computer
programs owing to the introduction of a corporate enterprise tax system,
which changed the effective tax rate, are as follows:
Reserve for deferral on capital gain on property Yen 14,137,521
Reserve for special depreciation Yen 11,189,929
Reserve for warranty on computer programs Yen 5,801,140
15
English Translation of the Auditor's Report Originally Issued in Japanese
Language
Independent Auditor's Report
----------------------------
April 28, 2003
The Board of Directors
Ricoh Company, Ltd. Asahi & Co.
Teruo Suzuki(Seal)
Representative Partner
Certified Public Accountant
Tetsuzo Hamajima(Seal)
Representative Partner and Engagement
Partner
Certified Public Accountant
Mikihiro Himeno(Seal)
Engagement Partner
Certified Public Accountant
We have audited the statutory report, that is the balance sheet, the statement
of income, the business report (limited to accounting matters) and the proposal
for appropriation of unappropriated retained earnings, and its supporting
schedules (limited to accounting matters) of Ricoh Company, Ltd. for the
business year from April 1, 2002 to March 31, 2003 in accordance with Article 2
of "the Law for Special Exceptions to the Commercial Code Concerning Audit, etc.
of Kabushiki Kaisha". With respect to the aforementioned business report and
supporting schedules, our audit was limited to those matters derived from the
accounting books and records of the Company and subsidiaries. These statutory
report and supporting schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on the statutory report
and supporting schedules based on our audit as an independent auditor.
We conducted our audit in accordance with generally accepted auditing standards
in Japan. Those auditing standards require to obtain reasonable assurance about
whether the statutory report and supporting schedules are free of material
misstatement. An audit is performed on a test basis, and includes assessing the
accounting principles used, the method of their application and estimates made
by management, as well as evaluating the overall presentation of the statutory
report and supporting schedules. We believe that our audit provides a reasonable
basis for our opinion. Our audit procedures also include those considered
necessary for the subsidiaries.
As a result of the audit, our opinion is as follows:
(1) The balance sheet and the statement of income present fairly the financial
position and the result of operations of the Company in conformity with
related laws and regulations and the Articles of Incorporation of the
Company.
(2) The business report (limited to accounting matters) presents fairly the
status of the Company in conformity with related laws and regulations and
the Articles of Incorporation of the Company.
(3) The proposal for appropriation of unappropriated retained earnings has
been prepared in conformity with related laws and regulations and the
Articles of Incorporation of the Company.
(4) With respect to the supporting schedules (limited to accounting matters)
there are no items to be noted that are not in conformity with the
provisions of the Commercial Code.
Our firm and engagement partner have no interest in the Company which should be
disclosed pursuant to the provisions of the Certified Public Accountants Law.
16
(Translation of the original corporate auditor's report issued in Japanese)
CORPORATE AUDITORS' REPORT
April 30, 2003
The Board of Corporate Auditors received reports from each of the corporate
auditors of the Company on their checks of the Directors' performance in fiscal
2003, from April 1, 2002 to March 31, 2003. The board prepared this report with
the corporate auditors' consensus.
1. SCOPE OF AUDIT BY CORPORATE AUDITORS
Each of the corporate auditors, in accordance with the policy and work
shares prescribed by the Board of Corporate Auditors, attended the
meetings of the Board of Directors and other important meetings of the
Company, received reports on business operations from the Directors, etc.,
inspected important written approvals, etc., inquired into the activities
and assets of the head office and principal places of business, and had
the subsidiaries of the Company submit reports on their business
operations whenever necessary. The board also received reports and
briefings from the independent auditors, and examined the accounting
documents and schedules of the Company.
With respect to any transactions by the Directors, transactions between
the Directors and the Company involving a conflict of interests, the
gratuitous provision of profits by the Company, and any other transactions
not customary in nature between the Company and its subsidiaries or
shareholders, and acquisition and disposal of treasury shares, we, in
addition to the above mentioned auditing, asked the Directors, etc., to
submit reports, whenever necessary, and examined these transactions in
detail.
2. RESULTS OF AUDIT
(1) The procedures followed and the results produced by Asahi & Co., the
independent auditors, in their auditing are reasonable and
appropriate;
(2) The business report of the Company fairly presents the position of
the Company in accordance with laws and ordinances and the Articles
of Incorporation of the Company;
(3) The proposal for appropriation of retained earnings of the Company
contains no particulars to be pointed out in the light of the
financial position of the Company and other circumstances;
(4) The schedules of the Company fairly present the matters to be stated
therein and contain no particulars to be pointed out; and
(5) The Directors performed their duties honestly in accordance with
laws and ordinances and the Articles of Incorporation of the
Company, including in fulfilling their duties toward subsidiaries.
With respect to any competitive transactions by the Directors,
transactions between the Directors and the Company involving a conflict of
interest, the gratuitous provision of profits by the Company, and any
other transactions not customary in nature between the Company and its
subsidiaries or shareholders, and acquisition and disposal of treasury
shares, we concluded that none of the Directors swerved from their duties.
Board of Corporate Auditors, Ricoh Company, Ltd.
___________________________________________________
Hisaaki Koga, Corporate Auditor (Full-time)
___________________________________________________
Hideyuki Takamatsu, Corporate Auditor (Full-time)
___________________________________________________
Kenji Matsuishi, Corporate Auditor
___________________________________________________
Takehiko Wada, Corporate Auditor
Note: Corporate auditors Kenji Matsuishi and Takehiko Wada are outside
auditors as stipulated in Paragraph 1, Article 18 of the Law Concerning
the Special Measures Applicable to Auditing Practices under the
Commercial Code.
17
(Reference)/1/
CONSOLIDATED BALANCE SHEETS
(March 31,2003 and 2002)
(Millions of yen)
------------------------------------------------------------------------------------------------------------------------------------
2003 2002 2003 2002
------------------------------------------------------------------------------------------------------------------------------------
Assets Liabilities
------ -----------
Current Assets Current Liabilities
Cash and time deposits 200,330 182,650 Trade payables 280,798 277,753
Trade receivables 417,942 442,399 Short-term borrowings 138,713 228,408
Marketable securities 107 22,935 Other current liabilities 169,072 159,540
Inventories 146,051 162,176 Total Current Liabilities 588,583 665,701
Other current assets 58,083 53,508 Long-term Liabilities
Total Current Assets 822,513 863,668 Long-term indebtedness 345,902 332,995
Accrued pension and severande costs 209,011 119,572
Other long-term liabilities 30,653 30,592
Total Long-Term Liabilities 585,566 483,159
Total Liabilities 1,174,149 1,148,860
Minority Interests 53,259 51,048
Shareholders' Investment
Common stock 135,364 120,461
Additional paid-in capital 186,521 171,628
Fixed Assets Retained earnings 434,748 385,741
Property, Plant and Equipment 248,752 259,380 Accumulated other comprehensive -94,733 -44,376
Finance receivables 476,293 447,829 income (loss)
Other investments 337,364 262,051 Treasury stock -4,386 -434
Total Fixed Assets 1,062,409 969,260 Total Shareholders' Investment 657,514 633,020
----------------------------------------------------------------------------------------------------------------------------------
Total Assets 1,884,922 1,832,928 Total Liabilities and Shareholders' 1,884,922 1,832,928
Investment
----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
(For the years ended March 31)
(Millions of yen)
--------------------------------------------------------------------------
Fiscal 2003 Fiscal 2002
--------------------------------------------------------------------------
Net sales 1,738,358 1,672,340
Cost of sales 993,009 972,394
Gross profit 745,349 699,946
Selling, general and administrative 611,695 570,251
expenses
Operating income 133,654 129,695
Other income
Interest and dividend income 3,772 4,753
Interest expense 6,853 8,233
Other, net 7,103 12,265
Income before income taxes, minority 123,470 113,950
interests, and equity in earnings
of affiliates 51,984 51,147
Provision for income taxes 1,376 3,080
Minority interests
Equity in earnings of affiliates 2,403 1,891
Net income 72,513 61,614
--------------------------------------------------------------------------
Note: The consolidated financial statements were prepared in conformity with
accounting principles generally accepted in the United States.
18
(Reference)/2/
CONSOLIDATED STATEMENTS OF CASH FLOWS
(For the years ended March 31)
(Millions of yen)
--------------------------------------------------------------------------------------------------------
2003 2002
--------------------------------------------------------------------------------------------------------
I. Cash Flows from Operating Activities:
1. Net income 72,513 61,614
2. Adjustments to reconcile net income to net cash
provided by operating activities--
Depreciation and amortization 76,551 73,782
Decrease (increase) in trade receivables 22,176 -20,006
Decrease in inventories 14,983 21,194
Increase (decrease) in trade payables 5,632 -19,535
Other, net -6,113 -11,911
--------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 185,742 105,138
--------------------------------------------------------------------------------------------------------
II. Cash Flows from Investing Activities:
Purchases and sales of property, plant and equipment 71,739 74,475
Purchases and sales of available-for-sale securities 27,706 14,543
Others 1,246 21,489
--------------------------------------------------------------------------------------------------------
Net cash used in investing activities -98,199 -81,421
--------------------------------------------------------------------------------------------------------
III. Cash Flows from Financing Activities:
Net changes in borrowings and bonds -39,055 45,521
Cash dividends paid -10,176 -8,322
Payment of Purchases of treasury stocks -17,281 -1,054
Others -631 90
--------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities -67,143 36,235
--------------------------------------------------------------------------------------------------------
IV. Effect of Exchange Rate Changes on Cash and Cash -1,329 2,474
Equivalents
--------------------------------------------------------------------------------------------------------
V. Net Increase in Cash and Cash Equivalents 19,071 62,426
--------------------------------------------------------------------------------------------------------
VI. Cash and Cash Equivalents at Beginning of Year 170,172 107,746
--------------------------------------------------------------------------------------------------------
VII. Cash and Cash Equivalents at End of Period 189,243 170,172
--------------------------------------------------------------------------------------------------------
Note: The consolidated financial statements were prepared in
conformity with accounting principles generally accepted in the
United States.
19
DOCUMENTS FOR REFERENCE IN EXERCISING VOTING RIGHTS
1. NUMBER OF VOTING RIGHTS OF ALL SHAREHOLDERS: 736,045
2. AGENDA AND INFORMATION
AGENDA 1: Approval of the proposed appropriation of retained earnings for
fiscal 2003 (April 1, 2002 to March 31, 2003)
The proposal for appropriation of retained earnings is described in the
attached document (See p. 14).
Cash dividends to shareholders at the end of the current term will be paid,
in consideration of our business results for the current term, the
strengthening of our corporate structure, and the expansion of business in
the future, at the rate of Yen 7.00 per share. Including interim cash
dividends for the current term, shareholders will earn a total of Yen
14.00 per share in cash dividends.
AGENDA 2: Purchases of its own shares
To be able to carry out a flexible capital policy in the face of the
changing business climate, the Company wishes to acquire treasury stock
within the limits of 32,000,000 ordinary shares, worth Yen 60 billion,
in accordance with the provisions of Article 210 of the Commercial Code.
The acquisitions would be from the period after the closing of this general
meeting to the closing of the next ordinary general meeting of
shareholders.
AGENDA 3: Partial amendment of the Articles of Incorporation
(1) Reasons for changes
1) To support further operational progress, add "direct marketing through
the Internet, facsimile, and telephone, etc.," to the business purpose
(Change proposal 3-8).
2) Based on a resolution of a board meeting held on March 28, 2003, the
Company retired 7 million shares of treasury stock, thus altering the
number of shares issued and outstanding (Change proposal 5-1).
3) In accordance with the implementation of the Law Amending Part of the
Commercial Code (Law No. 44, 2002) on April 2003, systems were
introduced to handle lost share certificates and purchase additional
fractional unit shares. In addition, the requirements for quorums for
special resolutions at general shareholders meetings can be eased
subject to the provisions of the Articles of Incorporation.
Accordingly, the Company proposes such amendments as the regulation of
the register of lost share certificates, the introduction of purchases
of fractional unit shares for the benefit of shareholders, and a
reduction in quorums for special resolutions at general shareholder
meetings to one-third of the voting rights of all shareholders to make
the adoption of special resolutions more feasible (new additions to
Articles 7, 8-3, 9, and 14-2).
4) On May 1, 2003, the Law Partially Amending the Law Concerning the
Special Measures Applicable to Auditing Practices as Provided in the
Commercial Code and Incorporated Companies (2001; Law No. 149) came
into effect, mandating an extension of the terms of office of auditors
from three years to four (Change to Article 25 of Articles of
Incorporation).
5) On April 1, 2002, the Law Partially Amending the Commercial Code
(2001; Law No. 128) was implemented, leading to convertible bonds with
right of new share options, eliminating the need in articles of
incorporation to specify initial dividend conversion dates for
convertible bonds. Once all convertible bonds that the Company issues
are redeemed, Article 33 of the current Articles of Incorporation
would be deleted.
6) Changes to the number of articles through the creation of new ones and
changes to existing articles.
(2) Details of proposed revisions
Proposed revisions to the Articles of Incorporation are as underlined
below:
----------------------------------------------------------------------------------------------------------------------------------
CURRENT ARTICLES OF INCORPORATION PROPOSED REVISIONS
----------------------------------------------------------------------------------------------------------------------------------
(Purpose) (Purpose)
Article 3 The Company aims to engage in the following Article 3 The Company aims to engage in the following
businesses. businesses.
Provisions 1. to 7. omitted. Provisions 1. to 7. (unchanged)
8....all operations that are supplementary or related to 8....direct marketing through the Internet, facsimile, and
-- ----------------------------------------------------------
the above. telephone, etc.
---------------
9. all operations that are supplementary or related to the
---
above.
----------------------------------------------------------------------------------------------------------------------------------
(Total number of shares to be issued; types of share (Total number of shares to be issued; types of share
certificates) certificates)
Article 5 The total number of shares to be issued by Article 5
the Company is one billion (1,000,000,000). 1. The total number of shares to be issued by the
-------------------------- Company is nine hundred and ninety-three million
If some shares are cancelled, the number of -------------------------------------
shares cancelled shall be deducted from the (993,000,000). If some shares are cancelled, the
total number of shares issued. The types of ------------
share certificates to be issued by the number of shares cancelled shall be deducted from
Company shall be decided in accordance with the total number of shares issued.
Share Handling Regulations to be 2. The types of share certificates to be issued by the
established by the Board of Directors. Company shall be decided in accordance with Share
Handling Regulations to be established by the Board
of Directors.
----------------------------------------------------------------------------------------------------------------------------------
(Number of shares per unit (tan-i)) (Number of shares per unit (tan-gen)
Article 6 The number of shares per unit (tan-gen) of Article 6
the Company shall be one thousand (1,000). 1. The number of shares per unit (tan-gen) of the
The Company shall not issue securities in Company shall be one thousand (1,000).
amounts less than one unit, although the 2. The Company shall not issue securities in amounts
Share Handling Regulations will not less than one unit, although the Share Handling
necessarily stipulate this. Regulations will not necessarily stipulate this.
----------------------------------------------------------------------------------------------------------------------------------
(New) (Increased purchases of shares in less than one unit)
-----------------------------------------------------
Article 7 Under the Share Handling Regulations, the
---------------------------------------------------
Company can demand that shareholders (including
-----------------------------------------------
de facto shareholders, the same applies hereinafter)
----------------------------------------------------
with stakes of less than one unit in the Company
------------------------------------------------
sell their holdings to transform holdings less
----------------------------------------------
than one unit into one unit.
----------------------------
----------------------------------------------------------------------------------------------------------------------------------
20
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CURRENT ARTICLES OF INCORPORATION PROPOSED REVISIONS
----------------------------------------------------------------------------------------------------------------------------------
(Transfer agent) (Transfer agent)
Article 7 The Company shall have a transfer agent for Article 8
- the handling of its shares. -
The transfer agent and its place of business 1. The Company shall have a transfer agent for the
shall be decided by resolution of the Board handling of its shares.
of Directors and announced publicly. 2. The transfer agent and its place of business shall
The list of the Company's shareholders be decided by resolution of the Board of Directors
(includes the list of de facto shareholders; and announced publicly.
the same applies hereinafter) shall be kept 3. The list of the Company's shareholders (includes
at the place of business of the transfer the list of de facto shareholders; the same
agent. The transfer agent shall be made to applies hereinafter) and stock lapse register
handle all the businesses relating to the ------------------------
Company's shares, such as the transfer of shall be kept at the place of business of the
shares and the purchase of quantities of less transfer agent. The transfer agent shall be made
than one unit (tan-gen) of shares: the to handle all the businesses relating to the
Company shall not involve itself in any of Company's shares, such as the transfer of shares
the said businesses. and the purchase or increased purchase of
---------------------
quantities of less than one unit (tan-gen) of
shares: the Company shall not involve itself in
any of the said businesses.
----------------------------------------------------------------------------------------------------------------------------------
(Share Handling Regulations) (Share Handling Regulations)
Article 8 The transfer of shares, the purchase of Article 9 The transfer of shares, lapsed share registration
- quantities of less than one unit (tan-gen) of - -------------------------
shares, and any other businesses relating to procedures, the purchase or increased purchase of
the Company's shares shall be handled in ----------- ---------------------
accordance with Share Handling Regulations to quantities of less than one unit (tan-gen) of
be established by the Board of Directors. shares, and any other businesses relating to the
Company's shares shall be handled in accordance
with Share Handling Regulations to be established
by the Board of Directors.
----------------------------------------------------------------------------------------------------------------------------------
(Basic date) (Basic date)
Article 9 In each accounting period, the Company shall Article 10
- deem the shareholders that are registered or --
recorded in the final list of shareholders 1. In each accounting period, the Company shall deem
(includes de facto shareholders; the same the shareholders that are registered or recorded
applies hereinafter) to be the shareholders in the final list of shareholders (includes de
that can exercise their rights at the facto shareholders; the same applies hereinafter)
ordinary general meeting of shareholders for to be the shareholders that can exercise their
the accounting period. rights at the ordinary general meeting of
Notwithstanding the preceding paragraph, the shareholders for the accounting period.
Board of Directors may, if necessary, resolve 2. Notwithstanding the preceding paragraph, the Board
to deem the shareholders or pledgees that are of Directors may, if necessary, resolve to deem
registered or announced previously to be the the shareholders or pledgees that are registered
shareholders or recorded in the list of or announced previously to be the shareholders or
shareholders as of a specific date set and recorded in the list of shareholders as of a
announced previously to be the shareholders specific date set and announced previously to be
or pledgees that can exercise their rights. the shareholders or pledgees that can exercise
their rights.
----------------------------------------------------------------------------------------------------------------------------------
(Shareholders' Meeting) (Shareholders' Meeting)
Article 10 Regular general meetings of shareholders Article 11
-- shall be held in June every year, while --
extraordinary shareholder meetings shall be 1. Regular general meetings of shareholders shall be
held as required. The president shall convene held in June every year, while extraordinary
the annual general meeting of shareholders in shareholder meetings shall be held as required.
line with a resolution of the Board of 2. The president shall convene the annual general
Directors. If the president suffers an meeting of shareholders in line with a resolution
accident, other directors will convene the of the Board of Directors.
gathering in a previously determined rank. 3. If the president suffers an accident, other
directors will convene the gathering in a
previously determined rank.
----------------------------------------------------------------------------------------------------------------------------------
(Exercise of voting rights by proxy) (Exercise of voting rights by proxy)
Article 11 Any of the shareholders may exercise his Article 12
-- voting rights by means of a proxy who is also --
a shareholder of the Company. The said 1. Any of the shareholders may exercise his voting
shareholder or proxy must submit a power of rights by means of a proxy who is also a
attorney to vote to the Company. shareholder of the Company.
2. The said shareholder or proxy must submit a power
of attorney to vote to the Company.
----------------------------------------------------------------------------------------------------------------------------------
Article 12 Article 13
-- --
-- Provisions omitted -- (Unchanged)
------------------------
----------------------------------------------------------------------------------------------------------------------------------
21
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CURRENT ARTICLES OF INCORPORATION PROPOSED REVISIONS
----------------------------------------------------------------------------------------------------------------------------------
Article 13 Method of resolutions Article 14 Method of resolutions
-- Resolutions of the general meeting of --
shareholders shall, except where otherwise 1. Resolutions of the general meeting of shareholders
provided by law or in the Articles of shall, except where otherwise provided by law or
Incorporation, require a simple majority of in the Articles of Incorporation, require a simple
shareholders attending to pass. majority of shareholders attending to pass.
(New) 2. Under the special resolutions determined under
----------------------------------------------
Article 343 of the Commercial Code, annual general
--------------------------------------------------
meetings of shareholders shall require the
------------------------------------------
attendance of shareholders representing one-third
-------------------------------------------------
of voting rights for a quorum and representing at
-------------------------------------------------
least two-thirds to vote on resolutions.
----------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Articles 14 and 15 Articles 15 and 16
-- -- -- --
-- Provisions omitted -- (Unchanged)
----------------------------------------------------------------------------------------------------------------------------------
(Election of directors) (Election of directors)
Article 16 Directors shall be elected at a general Article 17
-- meeting of shareholders. Resolution for the --
election mentioned above shall be adopted by 1. Directors shall be elected at a general meeting of
a majority vote of the shareholders present shareholders.
at the meeting who hold voting rights 2. Resolution for the election mentioned above shall
representing not less than one-third of the be adopted by a majority vote of the shareholders
voting rights of all shareholders. Cumulative present at the meeting who hold voting rights
voting shall not be used in the election of representing not less than one-third of the voting
directors. rights of all shareholders.
3. Cumulative voting shall not be used in the
election of directors.
----------------------------------------------------------------------------------------------------------------------------------
Articles 17 and 18 Articles 18 and 19
-- -- -- --
-- Provisions omitted -- (Unchanged)
----------------------------------------------------------------------------------------------------------------------------------
(Directors with roles and representative directors) (Directors with roles and representative directors)
Article 19 Upon a resolution, the Board of Directors Article 20
-- can appoint from among its number one chairman, --
one president, vice presidents, senior 1. Upon a resolution, the Board of Directors can
managing directors, and managing directors. appoint from among its number one chairman, one
Upon a resolution, the Board of Directors president, vice presidents, senior managing
shall choose the representative directors. directors, and managing directors.
2. Upon a resolution, the Board of Directors shall
choose the representative directors.
----------------------------------------------------------------------------------------------------------------------------------
(Convening meetings of the board of directors, chairman (Convening meetings of the board of directors, chairman of the
of the board, and resolutions) board, and resolutions)
Article 20 Except where otherwise determined under the Article 21
-- law, the board of directors shall make --
resolutions on material matters related to 1. Except where otherwise determined under the law,
the execution of operations. The chairman the board of directors shall make resolutions on
shall convene and chair board gatherings. If material matters related to the execution of
the chairman is absent or has suffered an operations.
accident, other directors will chair the 2. The chairman shall convene and chair board
gathering according to a previously gatherings. If the chairman is absent or has
determined rank. Notification of a board suffered an accident, other directors will chair
meeting to directors and auditors shall be the gathering according to a previously determined
three days prior to such a gathering. rank.
However, where all directors and auditors 3. Notification of a board meeting to directors and
otherwise agree the procedures for convening auditors shall be three days prior to such a
such meeting can be waived. Board resolutions gathering. However, where all directors and
shall require the attendance of half the auditors otherwise agree the procedures for
number of board members and a simple majority convening such meeting can be waived.
of the votes of those attending. 4. Board resolutions shall require the attendance of
half the number of board members and a simple
majority of the votes of those attending.
----------------------------------------------------------------------------------------------------------------------------------
Articles 21 and 22 Articles 22 and 23
-- -- -- --
-- Provisions omitted -- (Unchanged)
----------------------------------------------------------------------------------------------------------------------------------
(Election of auditors) (Election of auditors)
Article 23 Auditors shall be elected at a general Article 24
-- meeting of shareholders. --
Resolution for the election mentioned above 1. Auditors shall be elected at a general meeting of
shall be adopted by a majority vote of the shareholders.
shareholders present at the meeting who hold 2. Resolution for the election mentioned above shall
voting rights representing not less than be adopted by a majority vote of the shareholders
one-third of the voting rights of all present at the meeting who hold voting rights
shareholders. representing not less than one-third of the voting
rights of all shareholders.
----------------------------------------------------------------------------------------------------------------------------------
22
----------------------------------------------------------------------------------------------------------------------------------
CURRENT ARTICLES OF INCORPORATION PROPOSED REVISIONS
----------------------------------------------------------------------------------------------------------------------------------
(Meetings and resolutions of auditors) (Meetings and resolutions of auditors)
Article 24 Auditors shall be appointed for three years until Article 25 Auditors shall be appointed for four years
-- ----- -- ----
the date of annual general meeting of shareholders until the date of annual general meeting of
in their final year. However, the term for auditors shareholders in their final year. However, the
chosen on a supplementary basis shall be until the term for auditors chosen on a supplementary
end of the term of the auditors that they have basis shall be until the end of the term of
replaced. the auditors that they have replaced.
----------------------------------------------------------------------------------------------------------------------------------
Article 25 Article 26
-- --
-- Provisions omitted -- (Unchanged)
--------------------------------------------------------------------------------------------------------------------------------
(Convening meetings of auditors and resolutions) (Convening meetings of auditors and resolutions)
Article 26 Except where otherwise determined under the law, Article 27
-- auditors shall make resolutions on matters related --
to auditing policies, operations, and techniques 1. Except where otherwise determined under the
for assessing the Company's financial assets, as law, auditors shall make resolutions on
well as other areas related to the work of matters related to auditing policies,
auditors. The board of auditors shall convene operations, and techniques for assessing the
gatherings of auditors. Notification of an auditor Company's financial assets, as well as other
meeting to auditors shall be three days prior to areas related to the work of auditors.
such a gathering. However, where all auditors 2. The board of auditors shall convene gatherings
otherwise agree the procedures for convening such of auditors.
meeting can be waived. Unless otherwise determined 3. Notification of an auditor meeting to auditors
under law, resolutions shall require the vote of shall be three days prior to such a gathering.
half the number of auditors. However, where all auditors otherwise agree
the procedures for convening such meeting can
be waived.
4. Unless otherwise determined under law,
resolutions shall require the vote of half
the number of auditors.
----------------------------------------------------------------------------------------------------------------------------------
Articles 27 to 32 Articles 28 to 33
----------------- -----------------
-- Provisions omitted -- (Unchanged)
----------------------------------------------------------------------------------------------------------------------------------
(Dividend calculation date) This article shall be deleted.
Article 33 Upon a request for the conversion of convertible
-- ------------------------------------------------
bonds, earnings dividends and interim dividends
-----------------------------------------------
shall be paid from October 1 through March 31 of
------------------------------------------------
the following year for shareholders of record as of
---------------------------------------------------
April 1 through September 30. The conversion shall
--------------------------------------------------
be deemed that of the date in which the conversion
--------------------------------------------------
was requested.
--------------
----------------------------------------------------------------------------------------------------------------------------------
23
AGENDA 4: Election of three (3) directors
The Company seeks the election of three candidate directors to expand the
board by that number and reinforce top management.
The candidates for directorships are as follows:
--------------------------------------------------------------------------------------------------------------------
Candidate Name Brief personal history No. of
number (Date of birth) Company's
shares held
--------------------------------------------------------------------------------------------------------------------
April 1973 Entered the Company
1 Shiroh Kondoh April 1995 Head of 1st Design Office, DEP Division, 3,000
(October 7, 1949) Imaging System Business Group
April 1998 General Manager, Printer & System Business
Division, Imaging System Business Group
July 1999 Deputy General Manager, Imaging System
Business Group
June 2000 Senior Vice President of the Company
June 2000 General Manager, Imaging System Business
Group (to date)
June 2002 Executive Vice President of the Company
(to date)
--------------------------------------------------------------------------------------------------------------------
April 1972 Entered the Company
2 Kazuo Togashi November 1992 President, Ricoh Espana S.A. 2,000
(November 28, 1949) April 1998 President, Ricoh Europe B.V.
June 2000 Group Executive Officer
April 2002 Chairman, Ricoh Europe B.V. (to date)
April 2002 Chairman, NRG Group Plc (to date)
June 2002 Executive Vice President of the Company (to
date)
--------------------------------------------------------------------------------------------------------------------
April 1971 Entered the Company
3 Kazunori Azuma January 1991 Software Group Leader, Marketing Group 3,000
(February 11, 1949) October 1994 President, Ricoh Hokkaido Co., Ltd.
April 1998 Deputy General Manager, System Solution
Division, Marketing Group
June 2000 Executive officer
October 2000 Group Executive Officer (to date)
October 2000 President, Ricoh Technosystems Co., Ltd.
(to date)
--------------------------------------------------------------------------------------------------------------------
Notes:
1. None of the above candidates have any special interests in the Company.
24
AGENDA 5: Election of two (2) corporate auditors
The terms of office of corporate auditors Hideyuki Takamatsu and Kenji
Matsuishi expire at the end of the general meeting of shareholders, and
the Company requests their reappointment at this gathering.
The board of corporate auditors has agreed to these nominations.
The corporate auditor candidates are as follows:
--------------------------------------------------------------------------------------------------------
Candidate Name Brief personal history No. of
number (Date of birth) Company's
shares held
--------------------------------------------------------------------------------------------------------
April 1966 Entered the Company
1 Hideyuki Takamatsu April 1987 General Manager, Accounting 3,000
(May 21, 1942) Department, Finance and
Accounting Division
October 1991 Manager, Imaging Business
Planning Office, Reprographic
Products Division RP
November 1995 Managing Director, San-ai Co.,
Ltd.
December 1997 Senior Managing Director,
San-ai Co., Ltd.
June 2000 Corporate auditor of the
Company (to date)
--------------------------------------------------------------------------------------------------------
April 1965 Completed apprenticeship at the
2 Kenji Matsuishi Legal Research and Training 2,000
(July 24, 1937) Institute
April 1965 Registered as lawyer
April 1965 Entered Takano & Higuchi Law
Office
February 1972 Head of Matsuishi Law Office
(to date)
June 1994 Corporate auditor of the
Company (to date)
--------------------------------------------------------------------------------------------------------
Notes:
1. None of the above candidates have any special interests in the Company.
2. Kenji Matsuishi is a candidate for outside auditor based on Law No. 18-1
Concerning the Special Measures Applicable to Auditing Practices as Provided
in the Commercial Code.
25