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 2006
Commission File Number 2 - 68279
RICOH COMPANY, LTD.
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(Translation of Registrant's name into English)
13-1, Ginza 8-Chome, Chuo-ku, Tokyo 104-8222, 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.
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(Registrant)
By: /S/ Etsuo Kobayashi
------------------------------
Etsuo Kobayashi
Corporate Senior Vice President
General Manager of
Personnel Division
June 7, 2006
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(TRANSLATION)
(Securities Code: 7752)
June 7, 2006
NOTICE OF
106TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
Dear Shareholder,
The Company would hereby like to inform you that the 106th ordinary general
meeting of shareholders will be held as follows, and would be grateful if you
could attend the meeting.
Those who will not be able to attend the meeting on the day are kindly
requested to consider appended "Reference Material for Exercising Voting
Rights" and indicate on the voting form enclosed herewith your approval or
disapproval of the matters to be resolved, and return the form bearing your
registered seal or signature to us. Your voting right can also be exercised via
the Internet (http://www.web54.net). Please submit your voting right no later
than Tuesday, June 27, 2006.
Yours faithfully,
Masamitsu Sakurai,
Chairman of the Board and
Representative Director,
President and Chief Executive Officer
Ricoh Company, Ltd.
1-3-6 Nakamagome, Ohta-ku, Tokyo
1. DATE AND TIME: Wednesday, June 28, 2006, from
10:00 a.m.
2. VENUE: Ricoh's registered head office: 1-3-6
Nakamagome, Ohta-ku, Tokyo
3. MEETING AGENDA:
ITEMS TO BE REPORTED: 1.The Business Report, Consolidated
Balance Sheets and Consolidated
Statements of Income as well as the
results of auditing consolidated financial
statements by account auditors and the
Board of Corporate Auditors for the fiscal
year ended March 31, 2006 (from April 1,
2005 to March 31, 2006).
2.The Non-Consolidated Balance Sheets
and Non-Consolidated Statements of
Income for the fiscal year ended March
31, 2006, and the acquisition of treasury
shares by resolution of the Board of
Directors in accordance with the
authorization provided in the Company's
Articles of Incorporation.
ITEMS TO BE RESOLVED:
Agenda 1: Approval of the proposed appropriation of
retained earnings for the fiscal year
Agenda 2: Partial amendment to the Articles of
Incorporation
Please see appended "Reference Material for
Exercising Voting Rights" (pages 35 to 48).
Agenda 3: Election of eleven (11) directors
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Agenda 4: Election of one (1) corporate auditor
Agenda 5: Election of one (1) substitute corporate auditor
Agenda 6: Granting of retirement allowances to retiring
directors and a corporate auditor
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Shareholders are requested to fill out and submit the appended voting form at
the reception desk on the above-mentioned date.
This English translation is an abridged version of the original notice in
Japanese. In the event of any discrepancy, the Japanese version shall prevail.
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TO OUR SHAREHOLDERS
I would like to take this opportunity to express our sincere appreciation
for our shareholders' continuous support to us in delivering our business
report for 106th business term.
Under the 15th Medium-term Business Plan, started in the fiscal year ended
March 31, 2006, the Ricoh Group strove to achieve a further growth and
development by reinforcing its corporate competitiveness through "creation of
new customer values" and "highly efficient business operations." By doing this,
we aim to meet the expectations of our shareholders.
Against the backdrop, consolidated net sales rose 5.6% year on year to
1,915.0 billion yen in the fiscal year ended March 31, 2006. The increase is
attributable mainly to strong sales of color copiers, color multifunction
printers (MFPs) and laser printers, at home and abroad. Net income increased
sharply 16.7% to 97.0 billion yen, due chiefly to a rise in high-value added
products and effects of continuous cost reductions.
With regard to dividends, an interim dividend of 12 yen per share is already
disbursed and a dividend of 12 yen per share, up 2 yen from a year earlier, at
the end of the term will be proposed (total of 24.0 yen for the fiscal year) at
the 106th Ordinary General Meeting of Shareholders.
It is true that there are various uncertain factors such as economic trends
and foreign exchange fluctuations, but the Ricoh Group is determined to do the
utmost efforts to achieve consolidated net sales of 2.05 trillion yen and net
income of 106 billion yen in the fiscal year ending March 31, 2007.
We look forward to your continuous support and encouragement to the Company
from now on.
Sincerely,
June 2006
Masamitsu Sakurai,
Chairman of the Board and
Representative Director, President and
Chief Executive Officer
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Reference Documents Attached to Notice of 106th Ordinary General Meeting of
Shareholders
BUSINESS REPORT FOR 106TH BUSINESS TERM
(April 1, 2005 to March 31, 2006)
(The following is an unofficial English translation of the Reports for the
106th Fiscal Year of the Company. The Company provides this translation for
your reference and convenience only and without any warranty as to its accuracy
or otherwise.)
1. OPERATING CONDITIONS
(1) OPERATING PROGRESS AND RESULTS OF THE RICOH GROUP
.. Overview
In the fiscal year under review, the Japanese economy continued to be steady in
general, because of an increase in capital investment driven by improved
corporate earnings and a recovery in consumer spending. In the U.S., the
economy remained stable helped by strong personal consumption and capital
expenditure, despite some unfavorable factors such as higher oil prices and
interest rates. The European economy continued making a moderate recovery on
the back of robust exports and an improvement in capital investment. In Asia,
Chinese and Indian economies continued to expand.
Under such circumstances, the Ricoh Group intends to be the company that
gains most from the 21st century. Based on this group vision, we will continue
to contribute both to productivity improvement and also to knowledge creation
for individuals working anytime, anywhere. This approach will enable us to gain
the utmost trust of our customers and continue to grow and develop our
business. Accordingly, our proactive approach encompasses not only products and
services for traditional office setups, but also customers working in a
broadband environment.
In terms of Office Solution business - our core competence - we in the Ricoh
Group have made every possible effort since the inception of our 13th
medium-term management plan to move beyond the manufacture and retail of
equipment such as copiers and printers so that we may overhaul our operational
structure, thus enabling us to support our customers in their efforts to
improve or enhance productivity through our offering.
In the 14th medium-term management plan, we defined our principal strategy
as "the realization of TDV, thereby broadening our revenue and earning
framework," as we recognize that efficient and effective Input/Output (I/O),
storage, and searching of TDV (i.e., total document volume), which includes
printed material in addition to photocopies, will become a pressing issue for
our customers.
While there are no changes to the direction of business structure reform and
principal strategy of the Ricoh Group in the 15th medium-term management plan,
we will aim to increase our corporate value by more than ever addressing issues
from the customer's standpoint and continuing to provide values that meet
customers' expectations.
In Office Solution Business, in particular, we are confident that we can
further solidify
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our business foundation by taking utmost advantage of the abilities and
strengths of the Ricoh Group, such as the comprehensive product line, customer
rapport through sales and service, ability to provide solutions, global
operations, image processing technology, and image processing and merging
technology, to respond to the diverse needs of even greater range of customers.
In Office Solution Business, we have identified "printing" as an area that
presents an outstanding opportunity for growth. Consequently, we will shift a
higher portion of our business resources to this area. Namely, we will continue
to advance such printing solutions as BC (black-color) conversion and TCO
(total cost of ownership) reduction solutions in the office, enter the high-end
production printing market, boost low-end color laser printers and expand gel
jet printers to expand the business domain and size. Furthermore, we will
revamp our sales system solutions and solutions platform in order to promote
document solution, which enables improved document workflow, and to capture a
greater share of major customers, particularly major global accounts.
On the other hand, we will allocate greater business resources to promising
businesses in the Industry Business. In addition, we will seek for greater
business shares of both Office Solutions and Industry Business in emerging
markets.
As technological differentiation is the key to realizing customer value in
each business and increasing profitability, we will continue our aggressive R&D
activities to boost our technical power.
The following shows our achievements in the basic policies during this term.
In Office Solution Business, we have continuously introduced new
multifunctional color printers and color laser printers in order to provide
more comprehensive product line. During this term, we have increased our market
share by launching various products: "imagio Neo C600Pro (sold overseas as
Aficio Color 5560)," which is a new generation of multifunctional color printer
and high-speed copy or print at 55 ppm (pages per minute); "imagio MP
C3000/2500 series," which enable to produce higher images with better quality
by utilizing Color PxP toner with Ricoh's own polymerization method and
features high security functions such as protection to prevent unauthorized
copying, which is the fastest in the industry of color printers; "imagio MP
C1500," which targets low-end business printer market employing the Gel Jet
technology.
Through these measures, the Ricoh Group obtained high market share in the
major color copier markets in Japan, the Americas and Europe.
In the high-end production printing market, we have released new 4 models
including "IPSiO SP 9500Pro (sold overseas as EMP156)," which is a printer for
main systems and actualizes high-speed printing at 156 ppm with high
durability. This allowed us to have more comprehensive product line from center
printers, which perform centralized printing of documents, to desktop printers,
which perform distributed printing at each location. By combining those
printers, we will provide efficient printing environment.
In the low-end business printer market, we have "IPSiO G series (sold
overseas as Aficio G series)," which is a printer with Gel Jet technology aimed
to replace other companies' black and white laser printers or inkjet printers.
Because of its high speed output, high quality image with plain paper and low
running cost, it received great reviews as a business printer, and we
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will continue to promote creating such products of high value-added in the
future.
As for the promoting our printing solution, we have developed business on a
global scale by proposing TCO reduction solutions utilizing copiers and
printers together and earning high reputation for our worldwide support and
services. In addition, in developing document solution in order to improve
workflow, we have provided software tools to link multifunctional printers with
host systems, improved the support structure of technology centers to propose
the optimum environment and support the introduction for those systems in
Japan, the Americas and Europe, and strengthened the sales structures for
solutions.
On the other hand, we have promoted allocation of management resources on
promising markets and businesses in the area of industry. The example for this
is the establishment of a thermal paper production and sales company in China.
Furthermore, we have continued priority investment during this term to
achieve growth strategies and to improve revenue base.
In sales and services, we have integrated the maintenance service department
of domestic sales companies to Ricoh Technosystems Co., Ltd. in order to
improve the system to enhance contacts with customers and to strengthen
abilities to provide solutions.
As for development, Ricoh Technology Center (Kanagawa Pref.) was established to
consolidate all the functions of forefront color products from the development
of elemental technology, to designing, to preparing the production and to
evaluation of the products. This center allows us to enhance the
cross-functional development structure and to further improve the development
efficiency.
In the fiscal year under review, consolidated net sales rose 5.6% year on
year to 1,915.0 billion yen. Operating income also increased 12.2% to 152.0
billion yen primarily due to a increased sales of value-added high-margin
product, and the effect of continuous cost-cutting activities. Income before
income taxes was 156.1 billion yen, up 15.4%. As a result, net income increased
16.7% to 97.0 billion yen.
.. CONSOLIDATED SALES BY CATEGORY (CONSOLIDATED BASIS)
Category Sales (billion yen) Percentage of total Change (%)
-------- ------------------- ------------------- ----------
Imaging Solutions 1,446.6 75.5 8.6
Network System Solutions 190.5 10.0 -4.3
Office Solution Business 1,637.2 85.5 6.9
Industry Business 120.6 6.3 1.0
Other Businesses 157.2 8.2 -3.7
Total 1,915.0 100.0 5.6
Japan 972.0 50.8 -0.1
Overseas 943.0 49.2 12.1
The Americas 387.4 20.2 19.0
Europe 434.8 22.7 6.3
Others 120.8 6.3 13.3
OFFICE SOLUTIONS (up 6.9% year on year to Yen 1,637.2 billion)
Sales of color copiers, multi-function printers (MFPs) and laser printers
were strong. These products support the customers to efficiently and
effectively manage the input/output, storage and retrieval of TDV (total
document volume), comprising not only copying but also printing functions.
Though sales of personal computers and servers
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decreased, sales at overall office solution business were up 6.9% year on
year to 1,637.2 billion yen.
Imaging Solutions (up 8.6 % year on year to 1,446.6 billion yen)
Trends in consolidated net sales (Unit: in billions of yen)
[CHART APPEARS HERE]
FY 2005............. 1,332.2
FY 2006............. 1,446.6
FY 2007 (E)......... 1,564.5
Imaging Solution: Digital copiers, color copiers, analog copiers,
printers, facsimile machines, diazo copiers,
scanners, multi-functional printers (MFP), printers,
other equipment, and ancillary supplies and
services, etc.
While sales of digital copiers decreased as single-function printers are
increasingly upgraded to multi-function printers domestically, sales
continued to be firm overseas.
On the other hand, sales of multi-function printers were favorable, since
the Company continues to launch new products that can respond to customer
requests, such as adding color function or network convertibility.
Furthermore, sales of laser printers were strong domestically and overseas.
As a result, sales from this category increased 8.6% from the preceding year
to 1,446.6 billion yen.
Network System Solutions (down 4.3% year on year to Yen 190.5 billion)
Trends in consolidated net sales (Unit: in billions of yen)
[CHART APPEARS HERE]
FY 2005............. 199.1
FY 2006............. 190.5
FY 2007 (E)......... 202.1
Network System Solution: Personal computers, servers, networking
equipment, network-related software,
application software, services and support, etc.
This business is responsible for providing customer services and support. As
the Company's proposals to decrease total printing costs were highly
regarded, sales continued to increase in Japan and overseas. However, sales
of personal computers and servers in Japan were down. As a result, sales of
this business decreased 4.3% to 190.5 billion yen.
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INDUSTRY BUSINESS (up 1.0% year on year to Yen 120.6 billion)
Trends in consolidated net sales (Unit: in billions of yen)
[CHART APPEARS HERE]
FY 2005............. 119.4
FY 2006............. 120.6
FY 2007 (E)......... 129.0
Industry Business: Thermal media, optical equipment, semiconductors,
electric units, measuring equipment, etc.
Sales at thermal business and electric device business increased, and demand
recovered in the semiconductor business. Meanwhile, in the optical unit
business, sales decreased owing to sluggish demand. As a result, sales in
this business were 120.6 billion yen, up 1.0% from the previous year.
OTHER BUSINESSES (down 3.7% year on year to Yen 157.2 billion)
Trends in consolidated net sales (Unit: in billions of yen)
[CHART APPEARS HERE]
FY 2005............. 163.2
FY 2006............. 157.2
FY 2007 (E)......... 154.4
Other Business: Optical-disc products, digital cameras, etc.
Though sales of digital cameras continued to be favorable, revenue of the
optical disc business decreased especially overseas, as it scaled down in
previous year key module operations, such as independently developed drives
and components/units (excluding media). As a result, sales in this business
decreased 3.7% year on year to 157.2 billion yen.
(2) PLANT AND EQUIPMENT INVESTMENT AND FUNDING OF THE RICOH GROUP
In the fiscal period under review, the Ricoh Group invested a total of 102.0
billion yen (including an investment of 44.6 billion yen by the Company) in
plant and equipment, mainly comprising the following.
Funds necessary for the plant and equipment investments above are procured
by funds at own hands and borrowings.
(a) Major equipment and facility expansions completed during the fiscal year:
Electronic components plant (Yashiro Plant)
Equipment-related supplies plant (Numazu Plant)
Technology center (Ricoh Technology Center)
(b) Major equipment and facility expansions in progress in the fiscal year:
Equipment-related supplies plant (Numazu Plant)
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(3) TRANSITION OF OPERATING RESULTS AND ASSETS OF THE RICOH GROUP AND THE
COMPANY
.. Transition of operating results and assets of the Ricoh Group
Fiscal year Fiscal year Fiscal year Fiscal year
ended ended ended ended
Items March 2003 March 2004 March 2005 March 2006
----- ----------- ----------- ----------- -----------
Net sales (billions of yen)............. 1,738.3 1,780.2 1,814.1 1,915.0
Profits before tax (billions of yen).... 123.4 143.0 135.3 156.1
Net income (billions of yen)............ 72.5 91.7 83.1 97.0
Net income per share (yen).............. 99.79 123.63 112.64 132.33
Total assets (billions of yen).......... 1,884.9 1,852.7 1,953.6 2041.1
Net assets (billions of yen)............ 657.5 795.1 862.9 960.2
Notes:
1. The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the U.S.
2. Net income per share is calculated based on the average number of shares
outstanding during the fiscal year.
.. Transition of operating results and assets of the Company
Fiscal year Fiscal year Fiscal year Fiscal year
ended ended ended ended
Items March 2003 March 2004 March 2005 March 2006
----- ----------- ----------- ----------- -----------
Net sales (billions of yen)............. 855.0 876.3 897.2 934.3
Ordinary income (billions of yen)....... 68.8 62.5 62.7 82.4
Net income (billions of yen)............ 42.8 58.5 41.9 55.0
Net income per share (yen).............. 58.75 79.18 56.64 74.81
Total assets (billions of yen).......... 933.3 937.3 949.5 982.5
Net assets (billions of yen)............ 596.6 642.4 659.9 694.7
Note:
Net income per share is calculated based on the average number of shares
outstanding during the fiscal year, from which the number of shares of treasury
stock is deducted.
(4) ISSUES THE RICOH GROUP FACES
Now that customers' needs have increasingly diversified, it seems that they are
not satisfied with only buying products or receiving specific services. The
business climate is also uneasy as the competition in the field of colorization
of documents and solutions is increasingly intensifying.
In order for the Ricoh Group to achieve growth and development amid the
drastically changing market environment, it is essential to boost our corporate
competitiveness through "creation of new for values customer" and "highly
efficient management structures."
In creating customer values, it is important that we forecast customer needs
and improve our products and services to meet these needs. To this end, we will
increase the scope of "customer satisfaction (CS) operation," in which we
aggressively cultivate new values by more than ever placing ourselves in the
shoes of our customers. We will also continue to enhance our technical ability
to materialize products and services that provide new values.
Our effort will also continue on making management more efficient to raise
our profitability. To raise profitability, we will streamline operational
processes at each business
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through structural reform. In addition, to improve managerial efficiency, we
will concentrate resources on more carefully selected businesses. Furthermore,
we will strive to reinforce the business structure by linking the results of
prior investment, which has been made continuously for corporate growth, to
profits.
The Ricoh Group will proactively invest resultant profits in growth fields
and the enhancement of technical power, aiming to increase sales and profits
while further raising corporate value.
2. CORPORATE PROFILE (as of March 31, 2006)
(1) MAIN BUSINESS OF THE RICOH GROUP
Office Solution Business Imaging Solutions
Digital copiers, color copiers, analog copiers,
printers, facsimile machines, diazo copiers,
scanners, multi-functional printers (MFP),
printers, other equipment, and ancillary supplies
and services, etc.
Network System Solutions
Personal computers, servers, networking
equipment, network-related software, application
software, services and support, etc.
Industry Business Thermal media, optical equipment, semiconductors,
electric units, measuring equipment, etc.
Other businesses Optical-disc products, digital cameras, etc.
(2) PRINCIPAL OFFICES AND PLANTS OF THE RICOH GROUP
.. Major domestic offices and plants
The Company (location) Subsidiaries, etc. (location)
-------------------------------------- --------------------------------------
Head Office (Tokyo) Ricoh Optical Industries Co., Ltd.
(Iwate Pref.)
Omori Office (Tokyo) Tohoku Ricoh Co., Ltd. (Miyagi Pref.)
Software Research Center (Kanagawa
Pref.) Ricoh Elemex Corporation (Aichi Pref.)
Shin-Yokohama Office (Kanagawa Pref.) Ricoh Printing Systems, Ltd. (Tokyo)
Ricoh Technology Center (Kanagawa Pref.) Ricoh Tohoku Co., Ltd. (Miyagi Pref.)
Central Laboratory (Kanagawa Pref.) Ricoh Sales Co., Ltd. (Tokyo)
Atsugi Plant (Kanagawa Pref.) Ricoh Chubu Co., Ltd. (Aichi Pref.)
Hatano Plant (Kanagawa Pref.) Ricoh Kansai Co., Ltd. (Osaka Pref.)
Gotemba Plant (Shizuoka Pref.) Ricoh Chugoku Co., Ltd. (Hiroshima
Pref.)
Numazu Plant (Shizuoka Pref.) Ricoh Kyushu Co., Ltd. (Fukuoka Pref.)
Fukui Plant (Fukui Pref.) Ricoh Technosystems Co., Ltd. (Tokyo)
Ikeda Plant (Osaka Pref.) Ricoh Leasing Co., Ltd. (Tokyo)
Yashiro Plant (Hyogo Pref.)
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.. Major overseas offices
SUBSIDIARIES, ETC. (LOCATION) SUBSIDIARIES, ETC. (LOCATION)
----------------------------- -------------------------------------------
RICOH CORPORATION (U.S.A) RICOH ELECTROICS, INC. (U.S.A)
LANIER WORLDWIDE, INC. (U.S.A) RICOH UK PRODUCTS LTD. (U.K)
RICOH EUROPE B.V. (Netherlands) RICOH INDUSTRIE FRANCE S.A.S. (France)
NRG GROUP PLC (U.K) RICOH ASIA INDUSTRY (SHENZHEN) LTD. (China)
RICOH CHINA CO., LTD. (China) SHANGHAI RICOH FACSIMILE CO., LTD. (China)
RICOH ASIA PACIFIC PTE. LTD.
(Singapore)
(3) SHAREHOLDERS' EQUITY
.. Total number of shares
Authorized: 1,500,000,000
Issued: 744,912,078
Total number of shares authorized increased 507 million shares following
the resolution at the 105th Ordinary General Meeting of Shareholders
held on June 28, 2005.
.. Number of shareholders at year-end: 45,276
.. Major shareholders
The shareholders' stake in The Company's stake in the
the Company shareholders
-------------------------- --------------------------
Thousands Investment Thousands Investment
Name of shares ratio (%) of shares ratio (%)
---- --------- ---------- --------- ----------
Master Trust Bank of Japan, Ltd. (Trust Account).. 66,722 8.96 -- --
Japan Trustee Services Bank, Ltd. (Trust Account). 44,460 5.97 -- --
The Bank of Tokyo-Mitsubishi UFJ, Ltd............. 36,203 4.86 -- --
Nippon Life Insurance Company..................... 31,306 4.20 -- --
Nipponkoa Insurance Co., Ltd...................... 18,193 2.44 55 0.01
The New Technology Development Foundation......... 15,839 2.13 -- --
State Street Bank and Trust Company 505103........ 15,009 2.01 --
State Street Bank and Trust Company............... 14,325 1.92 -- --
The Chase Manhattan Bank N.A. London.............. 14,006 1.88 -- --
The National Mutual Insurance Federation of
Agricultural Cooperatives....................... 11,947 1.60 -- --
Notes:
1. The number of treasury stocks (14,579 thousands of shares) is not included
in the chart above.
2. In addition to the above, stakes in the Company include 1,000 thousands of
shares (0.13%) that Nipponkoa Insurance Co., Ltd. owns and has entrusted
with Master Trust Bank of Japan, Ltd. These shares are registered in the
name of Masters Trust Bank of Japan, Ltd. as the owner, but Nipponkoa
Insurance Co., Ltd. reserves the right to instruct on exercising voting
rights on these shares.
.. Breakdown of shareholders
Category Thousands of shares held Number of shareholders Investment ratio (%)
-------- ------------------------ ---------------------- --------------------
Financial institutions............................ 334,688 227 44.93
Securities companies.............................. 12,836 47 1.72
Other domestic companies.......................... 32,871 745 4.41
Foreign companies................................. 291,237 652 39.10
Individual investors and others................... 58,699 43,604 7.88
Treasury stock.................................... 14,579 1 1.96
------- ------ ------
Total.......................................... 744,912 45,276 100.00
======= ====== ======
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(4) ACQUISITION, DISPOSAL AND OWNERSHIP OF SHARES OF TREASURY STOCK
(i) Acquired shares:
Common shares............................. 5,681,448 shares
Total acquisition cost.................... 11,820 million yen
Of the above, shares were purchased by resolution of the 105th Ordinary
Meeting of Shareholders based on authorization of the Articles of
Incorporation. The reason for the purchase: in order to realize a flexible
capital strategy to comply with changes in the business environment as
follows:
Common shares............................. 4,678,000 shares
Total amount of acquisition............... 9,993 million yen
(ii)Disposed shares:
Common shares............................. 1,218,160 shares
Total disposal cost....................... 2,395 million yen
(iii)Shareholdings at year-end:
Common shares............................. 14,579,522 shares
(5) EMPLOYEES OF THE RICOH GROUP AND THE COMPANY
.. Employees of the Ricoh Group
Common
Office solution Industry businesses in the
Classification business business Other businesses group Total
-------------- --------------- -------- ---------------- ----------------- ------
Number of employees........... 68,685 3,045 3,401 1,019 76,150
.. Employees of the Company
Change from previous
Number of employees fiscal year Average age Average length of service
------------------- -------------------- ----------- -------------------------
11,340....... 48 (Decrease) 41.0 18.2
(6) STATUS OF CONSOLIDATION
.. Major consolidated subsidiaries
Investment
Name Paid-in capital ratio Principle business
---- ------------------ ---------- -----------------------------------------
Tohoku Ricoh Co., Ltd........ 2,272 million JPY 100.0% Manufacture of office equipment
Ricoh Printing Systems, Ltd.. 5,000 million JPY 100.0 Manufacture and sales of office equipment
Ricoh Elemex Corporation..... 3,456 million JPY 55.9 Manufacture of office equipment
Ricoh Sales Co., Ltd......... 622 million JPY 100.0 Sales of office equipment
Ricoh Kansai Co., Ltd........ 700 million JPY 100.0 Maintenance service and sales of office
equipment
Ricoh Technosystems Co., Ltd. 2,128 million JPY 100.0 Sales of office equipment
Ricoh Leasing Co., Ltd....... 7,896 million JPY 51.1 General leasing
RICOH ELECTRONICS, INC....... 27 million USD 100.0 Manufacture of office equipment and
consumable supplies
RICOH CORPORATION............ 286 million USD 100.0 Sales of office equipment
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LANIER WORLDWIDE, INC. 256 million USD 100.0 Sales of office equipment
RICOH EUROPE B.V. 17 million EUR 100.0 Sales of office equipment
NRG GROUP PLC 49 million GBP 100.0 Sales of office equipment
Note:
The respective percentage of total investment ratio for Ricoh Elemex
Corporation, Ricoh Leasing Co., Ltd., Ricoh Electronics, Inc. and Lanier
Worldwide, Inc. include voting rights of those shares held by subsidiaries.
.. Consolidations
There were no changes that should be disclosed.
.. Result of consolidation
As of the end of fiscal year under review, the Ricoh Group had 259 consolidated
subsidiaries and 59 affiliates accounted for under the equity method. Results
of consolidation were as stated in "1. Operating Conditions, (3) Transition of
operating results and assets of the Ricoh Group and the Company, . Transition
of operating results and assets of the Ricoh Group."
(7) DIRECTORS AND CORPORATE AUDITORS
Position or principal duty Name
----------------------------------------------------------------------- -----------------
President and Representative CEO Masamitsu Sakurai
Director:
Director: Management reform, information and office business; Head of Business Koichi Endo
Management Promotion Office
Director: Domestic marketing; General Manager of Corporate Social Responsibility Masayuki
Division Matsumoto
Director: Overseas marketing; General Manager of Overseas Division; Head of Sales Katsumi Yoshida
Control Center
Director: Personnel, production, and legal affairs and intellectual property Takashi Nakamura
Director: Image engine/solutions development; General Manager of MFP Division Shiro Kondoh
and Head of Design Center
Director: General Manger of Marketing Group Kazunori Azuma
Director: Finance and IR; General Manager of Finance and Accounting Division Zenji Miura
Director: Managing Partner of IGNITE GROUP Nobuo Mii
Director: Co-director of Mitsui Life Financial Research Center, University of Takaaki Wakasugi
Michigan Ross School of Business Director and General Manager, Japan
Corporate Governance Research Institute, Inc. Professor, Faculty of
Business Administration, Tokyo Keizai University
Corporate Auditor: Full-time Hisaaki Koga
Corporate Auditor: Full-time Koji Tomizawa
Corporate Auditor: President of Matsuishi Law Office Kenji Matsuishi
Corporate Auditor: President and Representative Director of Sanai-oil Co., Ltd. Takehiko Wada
- 13 -
Notes:
1. Changes of directors took place in the fiscal year under review as follows:
June 2005: Takaaki Wakasugi was appointed as Director.
June 2005: Makoto Hashimoto retired from Managing Director.
June 2005: Kiyoshi Sakai retired from Managing Director.
June 2005: Kazuo Togashi retired from Managing Director.
June 2005: Yuji Inoue retired from Managing Director.
June 2005: Hideyuki Takamatsu retired from Corporate Auditor.
March 2006: Tatsuo Hirayama retired from Representative Director.
2. Directors Nobuo Mii and Takaaki Wakasugi are external directors appointed
under Article 188 Paragraph 2 Item 7-2 of the Commercial Code.
3. Corporate Auditors Kenji Matsuishi and Takehiko Wada are external corporate
auditors as stipulated in Article 18 Paragraph 1 of the Law for Special
Exceptions to the Commercial Code concerning Audit, etc. of Corporation.
(8) REMUNERATION, ETC. TO BE PAID TO ACCOUNTING AUDITORS
Remuneration, etc. to be paid to the accounting auditor KPMG AZSA & Co. by the
Company and its subsidiaries are as follows:
(i) Total sum of remuneration, etc. to be paid to the accounting auditor by
the Company and its subsidiaries, etc.: 213 million yen
(ii) Of the amount of (i) above, total sum of remuneration, etc. to be paid
for the audit certificate services provided in Article 2 Paragraph 1 of
the Certified Public Accountants Law: 183 million yen
(iii) Of the amount of (ii) above, total sum of remuneration, etc. to be paid
by the Company to the accounting auditor: 76 million yen
Note:
In the audit contract signed between the Company and the accounting auditor,
there is no classification between remuneration for audit services pursuant to
the Law for Special Exceptions to the Commercial Code concerning Audit, etc. of
Corporation and that in accordance with the Securities and Exchange Law.
Accordingly, the amount of (iii) above represents the sum of these
remunerations.
3. SUBSEQUENT EVENTS
.. Sales of some operations of a subsidiary
At its Board of Directors' Meeting held on April 3, 2006, San-Ai Co., Ltd.,
a subsidiary of the Company, decided to sell the content distribution
business currently under control of Giga Networks Company, a division of
San-Ai, to Mobile Alliance Co., Ltd., a subsidiary of Faith, Inc.
The decision to sell the content distribution business was made based on
the Ricoh Group's judgment that it would be the best for San-Ai and the
Ricoh Group as a whole if such business is able to grow and develop while
meeting the expectation of customers and business partners by becoming a
part of the Faith group's business and further improving the quality of
services.
Consummation of the 12.0-billion-yen sale is scheduled to occur on May 31,
2006. The gain on the sale is expected to be about 5.0 billion yen on the
basis of net income.
- 14 -
CONSOLIDATED BALANCE SHEETS (as of March 31, 2006)
Millions of yen
--------------------
As of March 31,
--------------------
2006 2005
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents....................... 187,055 186,857
Time deposits................................... 1,470 1,454
Marketable securities........................... 162 138
Trade receivables:
Notes.......................................... 75,678 75,233
Accounts....................................... 391,972 396,150
Less-Allowance for doubtful receivables........ (16,031) (17,451)
Total trade receivables...................... 451,619 453,932
Short-term lease receivables, etc.............. 178,882 166,636
Inventories:
Finished goods................................. 104,218 109,224
Work in progress and raw materials............. 65,027 58,141
Total inventories............................ 169,245 167,365
Deferred tax, etc............................... 55,110 53,365
Total Current Assets......................... 1,043,543 1,029,747
Fixed Assets:
Tangible fixed assets:
Land........................................... 46,721 43,077
Buildings and structures....................... 217,302 203,537
Machinery, instruments and fixtures............ 622,038 643,386
Construction in progress....................... 11,541 18,720
Less-Accumulated depreciation.................. (629,359) (661,310)
Total........................................ 268,243 247,410
Investment and other assets:
Finance receivable............................. 415,435 391,947
Investment securities.......................... 36,419 31,154
Investment in and advances to affiliates....... 52,028 49,316
Goodwill....................................... 51,934 47,502
Other intangible assets........................ 79,175 69,414
Lease deposit investment and other............. 94,406 87,179
Total investment and other assets............ 729,397 676,512
Total Fixed Assets:........................ 997,640 923,922
--------- ---------
Total Assets............................ 2,041,183 1,953,669
========= =========
- 15 -
CONSOLIDATED BALANCE SHEETS (as of March 31, 2006)
Millions of yen
--------------------
As of March 31,
--------------------
2006 2005
--------- ---------
LIABILITIES
Current Liabilities:
Short-term borrowings............................... 82,520 38,710
Current maturities of Long-term indebtedness
trade payables..................................... 103,131 144,808
Notes............................................. 25,591 29,686
Accounts.......................................... 313,561 306,813
Total purchase indebtedness...................... 339,152 336,499
Accused income tax................................. 40,936 24,074
Accrued expenses, etc.............................. 118,289 127,423
Total Current Liabilities...................... 684,028 671,514
Long-term Liabilities:
Long-term indebtedness.............................. 195,626 226,567
Accused pension benefit obligation.................. 97,020 92,672
Long-term deferred tax.............................. 51,374 48,767
Total Long-term Liabilities:................... 344,020 368,006
Total Liabilities........................... 1,028,048 1,039,520
Minority Interests.................................... 52,890 51,151
Common stock.......................................... 135,364 135,364
Additional paid - in Capital.......................... 186,450 186,551
Retained earnings..................................... 665,394 584,515
Accumulated other comprehensive income (loss)......... 4,099 (21,963)
Treasury stock........................................ (31,062) (21,469)
Total shareholders' equity....................... 960,245 862,998
--------- ---------
Total Liabilities, Minority Interests and
Shareholders' Equity......................... 2,041,183 1,953,669
========= =========
NOTES TO CONSOLIDATED BALANCE SHEETS
1. Allowance for doubtful accounts related to short-term lease receivables and
lease receivables: 16,394 million yen
2. Other accumulated comprehensive income (loss) includes accumulated foreign
currency translation adjustments, unrealized gain (loss) on securities,
unrealized gain (loss) on derivatives, and pension liability adjustments.
3. Pledged assets: 3,167 million yen
4. Guarantee obligation: 1,193 million yen
5. The amounts below one million yen are rounded off.
- 16 -
CONSOLIDATED STATEMENTS OF INCOME (from April 1, 2005 to March 31, 2006)
Millions of yen
---------------------------
For the year ended March 31,
---------------------------
2006 2005
--------- ---------
Net sales................................................... 1,915,090 1,814,108
Cost of sales............................................... 1,115,479 1,059,531
Gross profit............................................. 799,611 754,577
Selling, general and administrative expenses................ 647,597 619,071
Operating income......................................... 152,014 135,506
Other (income) expenses..................................... 4,185 (123)
Interest and dividend income............................. 2,896 2,240
Interest expenses........................................ (5,242) (4,684)
Foreign exchange gain and loss, net...................... 3,748 1,547
Others, net.............................................. 2,783 774
Income before income taxes, minority interests and
equity in earnings of affiliates....................... 156,199 135,383
Provision for income taxes:
Current.................................................. 60,857 39,281
Deferred................................................. (3,294) 11,353
Total income taxes................................... 57,563 50,634
Minority interests.......................................... (4,185) (4,726)
Equity in earnings of affiliates............................ 2,606 3,120
Net income............................................... 97,057 83,143
========= =========
NOTES TO CONSOLIDATED STATEMENTS OF INCOME
1. Net income per share: 132.33 yen
2. The amounts below 1 million yen are rounded off.
- 17 -
ACCOUNTING POLICIES REGARDING THE PREPARATION OF CONSOLIDATED FINANCIAL
STATEMENTS
SCOPE OF CONSOLIDATION
1. ITEMS RELATED TO SCOPE OF CONSOLIDATION
(1) NUMBER OF CONSOLIDATED SUBSIDIARIES: 259 COMPANIES
The name of major consolidated subsidiaries can be found in 2. Corporate
Profile, (6) Status of consolidation.
(2) MAJOR NON-CONSOLIDATED SUBSIDIARIES
Edisys Co., Ltd., others
Non-consolidated subsidiaries are all small-scale entities with net sales, net
income/loss and retained earnings insignificant for the Company. As such, their
non-inclusion in scope of consolidation does not significantly affect the
Company's consolidated financial statements.
2. APPLICATION OF THE EQUITY METHOD
(1) NUMBER OF NON-CONSOLIDATED SUBSIDIARIES AND AFFILIATES TO WHICH THE EQUITY
METHOD IS APPLIED: 59 COMPANIES
Name of major non-consolidated subsidiaries and affiliates to which the equity
method is applied: Coca-Cola West Japan Co., Ltd., others
(2) There are no non-consolidated subsidiaries or affiliates to which the
equity method is not applied.
SIGNIFICANT ACCOUNTING POLICIES
1. BASIS FOR PREPARING CONSOLIDATED FINANCIAL STATEMENTS
The consolidated statutory report including consolidated balance sheets and
consolidated statements of income has been prepared on the basis of accounting
principles generally accepted in the United States of America ("U.S.GAAP"), in
compliance with Article 179, Section 1 of the Commercial Code Enforcement
Regulations. However, in compliance with the article, certain disclosure that
is required on the basis of U.S.GAAP is omitted.
2. ACCOUNTING POLICY FOR SECURITIES
The Company's evaluation for securities is in conformity with Statement No.115,
"Accounting for Certain Investments in Debt and Equity Securities," of the U.S.
Financial Accounting Standards Board (FASB). Securities held by the Company and
its consolidated subsidiaries are classified mainly as available-for-sale
securities.
Those available -for -sale securities are reported at fair value with
unrealized gains and
- 18 -
losses, net of related taxes, excluded from earnings and reported in
accumulated other comprehensive income (loss).
3. ACCOUNTING POLICY FOR INVENTORIES:
Inventories are stated principally at the lower of cost or market using the
gross average method.
4. DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT:
Depreciated principally by using the declining-balance method. Meanwhile, most
of overseas subsidiaries use the straight-line method.
5. GOODWILL AND OTHER INTANGIBLE FIXED ASSETS:
Goodwill and intangible assets that have indefinite useful lives are not
amortized but tested at least annually for impairment, in accordance with the
FASB Statement No. 142, "Goodwill and Other Intangible Assets." Other
intangible fixed assets that have definite useful lives are depreciated by
using the straight-line method.
6. BASIS FOR PROVISION OF RESERVES
(1) ALLOWANCE FOR DOUBTFUL ACCOUNTS:
To prepare for losses incurred by bad debts, potential loss is calculated by
taking historical loss ratio and recoverability of loans to and receivables
from a certain customer. The estimated allowance for doubtful accounts is
calculated based on the past loan losses in consideration of current economic
conditions. For receivables in arrears, special estimated allowance for
doubtful accounts is set aside.
(2) RESERVE FOR RETIREMENT ALLOWANCES:
The measurement of pension costs and liabilities is determined in accordance
with SFAS No.87, "Employers' Accounting for Pensions." Under SFAS 87, changes
in the amount of either the projected benefit obligation or plan assets
resulting from actual results different from that assumed and from changes in
assumptions can result in gains and losses not yet recognized in the
consolidated financial statements. Amortization of an unrecognized net gain or
loss is included as a component of the net periodic benefit plan cost for a
year if, as of the beginning of the year, that unrecognized net gain or loss
exceeds 10 percent of the greater of (1) the projected benefit obligation or
(2) the fair value of that plan's assets. In such case, the amount of
amortization recognized is the resulting excess divided by the average
remaining service period of active employees expected to receive benefits under
the plan.
7. The consumption tax and the local consumption tax are excluded from profits
and losses.
- 19 -
Transcript of Account Auditor's Report on Consolidated Financial Statements
(originally issued in Japanese)
INDEPENDENT AUDITORS REPORT
May 15, 2006
The Board of Directors
Ricoh Company, Limited
KPMG AZSA & Co.
Tetsuzo Hamajima (seal),
Designated and Engagement Partner
Certified Public Accountant
Mikihiro Himeno (seal),
Designated and Engagement Partner
Certified Public Accountant
We have audited the consolidated statutory report, that is the consolidated
balance sheet and the consolidated statements of income of Ricoh Company,
Limited for the 106th business year (from April 1, 2005 to March 31, 2006) in
accordance with Article 19-2(3) of the "Law for Special Exceptions to the
Commercial Code Concerning Audits, etc., of Kabushiki Kaisha." The consolidated
statutory report is the responsibility of the Company's management. Our
responsibility is to express our independent opinion on the consolidated
statutory report based on our audit as independent auditors.
We conducted our audit in accordance with auditing standards generally
accepted in Japan. Those auditing standards require us to obtain reasonable
assurance about whether the consolidated statutory report is free of material
misstatement. An audit is conducted based on a test basis, and includes
assessing accounting principles used, the method of their application and
estimates made by management as well as evaluating the overall presentation of
the consolidated statutory report. We believe that our audit provides
reasonable bases for our opinion. Our audit procedures also include those
considered necessary for the Company's majority-owned subsidiaries.
As a result of the audit, in our opinion, the consolidated statutory report
referred to above presents fairly the consolidated results of their operations
in conformity with related laws and regulations and the Articles of
Incorporation of the Company.
No conflict of interest as defined by the Accounting Law exists between Ricoh
Company, Ltd. Our firm and engagement partners have no interest in the Company
which should be disclosed pursuant to the provisions of the Certified Public
Accountants Law of Japan.
- 20 -
Transcript of Corporate Auditor's Report on Consolidated Financial Statements
(originally issued in Japanese)
CORPORATE AUDITOR'S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
The Board of Corporate Auditors discussed with each Corporate Auditor
concerning the consolidated financial statements (the consolidated balance
sheets and the consolidated statements of income) of Ricoh Company, Limited for
the 106th business year (from April 1, 2005 to March 31, 2006). Upon
discussion, the board prepared this audit report as follows.
1. OUTLINE OF CORPORATE AUDITORS' AUDIT METHODS
In accordance with an audit policy prescribed by the Board of Corporate
Auditors, each corporate Auditor received reports on the consolidated financial
statements from the Directors, internal audit division, other administrative
divisions and Account Auditors, and audited the operational and financial
conditions of consolidated and non-consolidated subsidiaries as well when
necessary.
2. AUDIT RESULTS
We regard that the audit methods and results by KPMG AZSA & Co. are appropriate.
May 15, 2006
The Board of Corporate Auditors, Ricoh Company Limited
Full-time corporate auditors:
Hisaaki Koga (seal), Koji Tomizawa (seal)
Corporate auditors:
Kenji Matsuishi (seal), Takehiko Wada (seal)
Note: Corporate auditors Kenji Matsuishi and Takehiko Wada are external
auditors in accordance with Article 18 Item 1 of the Law for Special
Exceptions to the Commercial Code Concerning Audits, etc., of
Corporation.
- 21 -
NON-CONSOLIDATED BALANCE SHEETS (as of March 31, 2006)
Millions of yen
----------------
As of March 31,
----------------
2006 2005
------- -------
ASSETS
Current Assets:
Cash on hand and in bank.................................. 8,689 10,148
Notes receivable - trade.................................. 7,540 7,983
Accounts receivable - trade............................... 235,393 213,503
Marketable securities..................................... 50,985 128,186
Finished goods............................................ 26,352 29,336
Raw materials............................................. 3,405 3,665
Work in progress.......................................... 6,806 6,348
Supplies.................................................. 7,820 6,924
Short-term loans receivable............................... 102,411 33,753
Deferred tax assets....................................... 12,703 11,706
Accounts receivable - other............................... 14,510 29,510
Other current assets...................................... 6,019 5,493
Allowance for doubtful accounts........................... (1,582) (1,492)
Total Current Assets........................... 481,056 485,067
Fixed Assets:
Tangible fixed assets:
Buildings............................................. 48,532 40,423
Structures............................................ 1,894 1,783
Machinery and equipment............................... 19,391 18,422
Vehicles.............................................. 19 12
Tools................................................. 21,997 17,521
Land.................................................. 29,261 25,980
Construction in progress.............................. 9,277 4,806
Total tangible fixed assets........................ 130,374 108,949
Intangible fixed assets:
Leasehold right and others............................ 9,169 9,203
Software.............................................. 22,190 21,741
Total Intangible fixed assets...................... 31,359 30,945
Investments and Other Assets:
Investment securities................................. 33,217 28,058
Investment securities in subsidiaries and
affiliates.......................................... 191,797 184,437
Investment in affiliates.............................. 25,974 28,440
Long-term loans receivable............................ 80,814 70,170
Deferred tax assets................................... 1,620 7,073
Lease deposit......................................... 7,009 6,515
Other investments..................................... 2,289 2,582
Allowance for doubtful accounts....................... (2,962) (2,693)
Total investments and other assets................. 339,761 324,584
Total Fixed Assets............................. 501,494 464,480
------- -------
Total Assets................................. 982,551 949,547
======= =======
- 22 -
NON-CONSOLIDATED BALANCE SHEETS (as of March 31, 2006)
Millions of yen
----------------
As of March 31,
----------------
2006 2005
------- -------
LIABILITIES
Current Liabilities:
Notes payable - trade..................................... 4,641 6,033
Accounts payable - trade.................................. 133,036 109,598
Bonds due within one year................................. 35,000 40,000
Accounts payable - other.................................. 17,112 13,650
Accrued expenses.......................................... 33,153 34,872
Income tax payable, etc................................... 21,308 3,061
Reserve for bonuses....................................... 11,872 11,855
Warranty reserve.......................................... 418 389
Other current liabilities................................. 5,329 6,427
Total Current Liabilities............................. 261,871 225,887
Long-term Liabilities:
Bonds..................................................... 25,000 60,000
Long-term accounts payable - other........................ -- 2,810
Reserve for retirement allowances......................... 417 352
Reserve for directors' retirement bonuses................. 510 519
Total Long-term Liabilities........................... 25,927 63,683
Total Liabilities.................................. 287,799 289,571
(Shareholders' Equity)
Common Stock................................................. 135,364 135,364
Capital Surplus:
Additional paid-in capital................................ 180,804 179,522
Total Capital Surplus................................. 180,804 179,522
Retained Earnings
Legal reserve............................................. 14,955 14,955
Reserve for deferral of capital gain on
property................................................ 550 574
Reserve for special depreciation.......................... 1,272 802
Reserve for warranty on computer programs................. 167 218
Reserve for social promotion.............................. 117 112
General reserve........................................... 326,350 301,350
Unappropriated retained earnings.......................... 55,740 42,392
Total Retained Earnings............................... 399,153 360,404
Unrealized gain on valuation of stocks, etc.................. 8,769 4,598
Treasury stock............................................... (29,339) (19,914)
Total Shareholders' Equity......................... 694,752 659,975
------- -------
Total Liabilities and Shareholders'
Equity....................................... 982,551 949,547
======= =======
NOTES TO NON-CONSOLIDATED BALANCE SHEETS
1. Short-term receivable due from affiliates: Yen 319,437 million
Long-term receivable due from affiliates: Yen 81,192 million
2. Short-term payable due to affiliates: Yen 79,679 million
3. Accumulated depreciation on tangible fixed assets: Yen 347,019 million
4. Guarantee obligation: Yen 117 million
5. Trade notes receivable discounted with banks: Yen 48 million
6. In addition to the fixed assets stated in Balance Sheets, the Company uses
computers and electronic component manufacturing facilities under lease
agreements.
7. Net assets pursuant to Article 124-3 of the Enforcement Regulation of the
Commercial Code: Yen 8,769 million
8. The amounts less than one million yen are omitted.
- 23 -
NON-CONSOLIDATED STATEMENTS OF INCOME (from April 1, 2005 to March 31, 2006)
Millions of yen
-----------------
For the year ended
March 31,
-----------------
2006 2005
------- -------
Ordinary Income and Loss
Operating income and expenses
Operating income:............................................ 934,354 897,217
Net sales................................................. 934,354 897,217
Operating expenses:.......................................... 864,641 840,355
Cost of sales............................................. 645,496 619,968
Selling, general and administrative expenses.............. 219,144 220,387
Total operating income................................ 69,712 56,861
Non-operating income and expenses
Non-operating income:
Interest and dividend income.............................. 7,995 6,625
Other revenue............................................. 7,732 5,199
Total non-operating revenue........................ 15,728 11,824
Non-operating expenses:
Interest expenses......................................... 709 1,474
Other expenses............................................ 2,290 4,477
Total non-operating expenses.......................... 3,000 5,952
Ordinary income.............................................. 82,441 62,733
Extraordinary Income and Loss
Extraordinary income:
Gains on sales of fixed assets............................ 1,662 --
Total extraordinary income......................... 1,662 --
Net income before taxes................................... 84,103 62,733
Corporate, inhabitant and enterprise taxes................ 27,400 11,500
Corporate and other tax adjustments....................... 1,616 9,250
Net income................................................ 55,087 41,983
Profit carried over....................................... 9,404 9,630
Reversal of reserve for social contribution............... 83 88
Disposal of treasury stocks............................... 4 1,922
Interim cash dividends.................................... 8,830 7,387
Unappropriated retained earnings for the year............. 55,740 42,392
======= =======
NOTES TO NON-CONSOLIDATED STATEMENTS OF INCOME
1. Sales to affiliates: Yen 832,571 million
2. Purchase from affiliates: Yen 342,565 million
3. Non-operating transactions with affiliates: Yen 25,738 million
4. Net income per share: Yen 74.81
5. The amounts less than one million yen are omitted.
- 24 -
SIGNIFICANT ACCOUNTING POLICIES
1. ACCOUNTING POLICY FOR SECURITIES
(1) SECURITIES OF SUBSIDIARIES AND AFFILIATES
Securities of subsidiaries and affiliates are stated at cost based on the
moving average method.
(2) OTHER SECURITIES
Marketable securities: 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: Stated at cost based on the moving average method.
2. ACCOUNTING POLICY FOR DERIVATIVES
Derivatives are stated at market value.
3. ACCOUNTING POLICY FOR INVENTORIES
Inventories are stated principally at the lower of cost or market using the
gross average method.
4. DEPRECIATION AND AMORTIZATION
(1) TANGIBLE FIXED ASSETS:
Depreciated by using the declining-balance method.
Buildings (excluding fixtures) acquired after April 1, 1998 are depreciated
using the straight-line method.
Major useful life:
Buildings: 5-50 years
Machinery and equipment: 2-12 years
(2) INTANGIBLE FIXED ASSETS:
Depreciated by using the straight-line method.
With software for sale in the market, however, the Company records the
larger of an amortization based on projected sales profits or a uniform
amortization based on a projected effective sales period for the balance. The
initially projected effective sales term is three years. With software for
internal use, the Company uses the straight-line method based on a usable
period of five years.
5. BASIS FOR PROVISION OF RESERVES
(1) ALLOWANCE FOR DOUBTFUL ACCOUNTS:
To prepare for losses incurred by accounts receivables and loans, potential
loss is calculated by taking historical loss ratio in case of non-classified
loans/receivables. Potential loss for
- 25 -
classified loans/receivables is individually assessed.
(2) RESERVE FOR BONUSES:
Reserve for bonuses is provided by estimating the amount of bonuses payable to
employees for the fiscal year under review based on corporate rules for
calculating 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) RESERVE FOR RETIREMENT ALLOWANCES:
To prepare for projected retirement allowances, the Company records the
estimated obligations at the end of the fiscal year under review based on
projected year-end benefit obligations and plan assets. Actuarial gain or loss
is amortized using the straight-line method over periods (15 years) which are
less than the average remaining years of service of the employees, and the
amortization will be stated in the year following the year in which the gain or
loss is recognized. Underfunded pension obligations are amortized using the
straight-line method over periods (15 years) which are less than the average
remaining years of service of the employees.
(5) RESERVE FOR DIRECTORS' RETIREMENT BONUSES:
The Company calculates the necessary amount of directors' retirement bonuses at
the end of the fiscal year based on internal rules, in compliance with the
provision in Article 43 of the Enforcement Regulation of the Commercial Code.
6. CONSUMPTION TAXES
The consumption tax and the local consumption tax are excluded from profits and
losses.
7. LEASING
Finance leases where ownership does not transfer to the lessees are accounted
for in the same manner as operating leases.
8. HEDGE ACCOUNTING
(1) HEDGE ACCOUNTING METHODS:
The Company uses the allocation methods for currency swaps that meet the
requirements for the method.
(2) HEDGE INSTRUMENTS AND TARGETS:
There is no hedging instrument or hedged item at the end of the fiscal year
under review.
(3) HEDGING POLICIES:
In accordance with its internal Market Risk Management Rules, the Company uses
derivatives to manage the exposure of its assets and liabilities to market
fluctuations, within the range of the hedged assets and liabilities.
- 26 -
(4) HEDGE EFFECTIVENESS:
Effectiveness is assessed by rate analysis of the sum total of price
fluctuation involving hedged transactions and the sum total of price
fluctuation involving hedge methods. However, evaluation of hedge effectiveness
is omitted for currency swaps conducted through assigning transactions.
[CHANGE IN ACCOUNTING POLICY]
.. Accounting standards for impairment of fixed assets
The Company adopted "Accounting Standards for Impairment of Fixed Assets
("Opinion Concerning Establishment of Accounting Standards for Impairment
of Fixed Assets" issued by the Business Accounting Deliberation Council on
August 9, 2002) and "Implementation Guidance for Accounting Standards for
Impairment of Fixed Assets (Financial Accounting Standard Implementation
Guidance No. 6 issued by the Accounting Standards Board of Japan on
October 31, 2003) in the fiscal year under review.
The above adoption has little effect on profits and losses.
- 27 -
PROPOSAL FOR APPROPRIATION OF RETAINED EARNINGS
Yen
------------------------------
For the year ended March 31,
------------------------------
2006 2005
-------------- --------------
Unappropriated retained earnings at year-end.. 55,740,342,101 42,392,066,985
Reversal of reserve for deferral of capital
gain on fixed assets........................ 22,732,462 24,290,071
Reversal of reserve for special depreciation.. 393,585,677 186,560,715
Reversal of reserve for warranty on computer
program..................................... 28,886,758 50,684,928
Total.................................. 56,185,546,998 42,653,602,699
To be appropriated as follows:
Cash dividends................................ 8,763,990,672 7,347,958,440
(Per share)................................... (12.00) (10.00)
Directors' bonuses............................ 135,700,000 155,700,000
Reserve for special depreciation.............. 736,870,895 657,002,782
Reserve for social contribution............... 83,000,000 88,000,000
General reserve............................... 36,000,000,000 25,000,000,000
Retained earnings brought forward to the next
fiscal year................................. 10,465,985,431 9,404,941,477
============== ==============
Note: On December 1, 2005, the Company paid interim cash dividends of 12.0
yen per share, totaling 8,830,471,500 yen.
- 28 -
Transcript of the Account Auditors' Report (originally issued in Japanese)
INDEPENDENT AUDITORS' REPORT
May 15, 2006
The Board of Directors
Ricoh Company, Limited
KPMG AZSA & Co.
Tetsuzo Hamajima (seal),
Designated and Engagement Partner
Certified Public Accountant
Mikihiro Himeno (seal),
Designated and 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 retained earnings, and its supporting schedules
(limited to accounting matters) of Ricoh Company, Ltd. for the 106th business
year from April 1, 2005 to March 31, 2006 in accordance with Article 2(1) of
the "Law for Special Exceptions to the Commercial Code Concerning Audits, 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 its subsidiaries. The 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 independent auditors.
We conducted our audit in accordance with auditing standards generally
accepted in Japan. Those auditing standards require us 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 Company's subsidiary.
As a result of the audit, our opinion is as follows:
(1) The balance sheet and the statement of income fairly present the financial
position and the results 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) fairly presents 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 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 partners have no interest in the Company which should
be disclosed pursuant to the provisions of the Certified Public Accounts Law of
Japan.
- 29 -
Transcript of the Corporate Auditor's Report (originally issued in Japanese)
CORPORATE AUDITOR'S REPORT
The Board of Corporate Auditors received each corporate auditor's report on
audit methods and results concerning the execution of duties of each director
for the 106th business year from April 1, 2005 to March 31, 2006. Upon
discussion, the board prepared this audit report as follows.
1. OUTLINE OF CORPORATE AUDITORS' AUDIT METHODS
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., examined the status of activities and assets
(including laws, etc. governing corporate structure as well as the internal
corporate management system for risk management, etc.) 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
statutory reports and supporting schedules of the Company.
With respect to any transactions by the Directors, transactions between the
Directors and the Company involving conflict of interests, gratuitous provision
of profits by the Company and any other transactions not customary in nature
between the Company and its subsidiaries or shareholders, or related to
acquisition and disposal of treasury stock, we, in addition to the above
mentioned auditing, asked the Directors, etc. to submit reports, whenever
necessary, and examined these transactions in detail.
2. AUDIT RESULTS
(1) We hereby state that the audit method and results of KPMG AZSA & Co.,
independent auditors, are appropriate.
(2) We hereby state that the business report fairly presents the Company's
situation in accordance with the law and the Articles of Incorporation.
(3) There is no matter that should be specially indicated for the proposal for
appropriation of retained earnings, considering the state of the Company's
asset and other circumstances.
(4) Supporting schedules fairly present matters to be disclosed, and there is
no item that should be indicated.
(5) There is no important fact that represents an unfair act, or violates the
law or the Articles of Incorporation, with respect to the execution of
directors' duties including those for the subsidiary. Also, we found no
violations of duties by directors with respect to any transactions by the
Directors, no transaction between the Directors and the Company involving
conflict of interests, no gratuitous provision of profits by the Company
nor any other transactions not customary in nature between the Company and
its subsidiaries or shareholders, or related to acquisition and disposal of
treasury stock.
May 15, 2006
The Board of Corporate Auditors, Ricoh Company, Limited
Full-time corporate auditors:
Hisaaki Koga (seal), Koji Tomizawa
Corporate auditors:
Kenji Matsuishi (seal), Takehiko Wada (seal)
Note: Corporate auditors Kenji Matsuishi and Takehiko Wada are external
auditors in accordance with Article 18 Item 1 of the Law for Special
Exceptions to the Commercial Code Concerning Audits, etc., of
Kabushiki Kaisha.
- 30 -
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Millions of yen
-----------------
For the year ended
March 31,
-----------------
2006 2005
-------- -------
1. Cash flows from operating activities
Net income....................................................................... 97,057 83,143
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization................................................ 84,460 78,201
Decrease in trade receivables (increase).................................. 13,429 (26,429)
Decrease in inventories (increase)........................................ 3,726 (12,885)
Increase in trade payables (decrease)..................................... (4,495) 27,276
Other, net................................................................... (17,308) (16,526)
Net cash provided by operating activities............................. 176,869 132,780
2. Cash flows from investing activities
Expenditures for property, plant and equipment, net.............................. (98,708) (83,355)
Process from sales of available-for-sale securities, net......................... 3,013 38,689
Other, net....................................................................... (24,370) (51,532)
Net cash used in investing activities................................. (120,065) (96,198)
3. Cash flows from financing activities
Decrease of borrowings, indebtedness and debt securities, net.................... (32,383) (30,459)
Dividend payments................................................................ (16,178) (14,793)
Payment for purchase of treasury stock........................................... (10,653) (10,624)
Other, net....................................................................... (775) (563)
Net cash used in financing activities................................. (59,989) (56,439)
4. Effect of exchange rate changes on cash and cash equivalents..................... 3,383 1,200
5. Net increase (decrease) in cash and cash equivalents............................. 198 (18,657)
6. Cash and cash equivalents at beginning of year................................... 186,857 203,039
7. Adjustment for change of fiscal period on consolidated subsidiaries.............. -- 2,475
8. Cash and cash equivalents at year-end............................................ 187,055 186,857
- 31 -
REFERENCE: RESOLUTIONS REGARDING BASIC POLICY ON INTERNAL CONTROL SYSTEMS
The Company made the following resolutions at the Board of Directors' Meeting
held on May 17, 2006 regarding basic policy on construction of internal control
systems.
1. SYSTEM TO ENSURE THE EFFICIENT IMPLEMENTATION OF DIRECTORS' DUTIES AND
COMPLIANCE WITH LAWS AND ARTICLES OF INCORPORATION
The Company promotes a sense of alertness in execution of management and
execution of business, and in addition uses the following management
structures in order to further improve its quality and speediness.
(1) Management transparency and fairness of decision-making are
strengthened by the presence of outside directors.
(2) As part of the strengthening of management oversight functions by the
Board of Directors, the "Nomination and Compensation Committee," a
permanent organization composed of outside directors and designated
internal directors, makes propositions and resolutions concerning the
regulation of the nomination, dismissal and compensation of directors
and executive officers, etc.
(3) The executive officer system, its division of duties clarified, is
speeding up the decision-making process through the attribution of
authority to each business division.
(4) The "Group Management Committee" (GMC) is a decision-making
organization delegated by the Board of Directors, and composed of
executive officers who meet certain qualifications. The GMC operates
so as to accelerate consideration and decision-making from the
perspective of the optimum management of the entire Group, concerning
proposals on the most appropriate strategies for direction of each
business division and the entire Group, within the limits granted to
it.
(5) The "Disclosure Committee" is an independent organization that assures
the accuracy, timeliness and comprehensiveness of disclosure of
corporate information, and it performs checks on the process for the
production of disclosed information.
2. SYSTEMS RELATED TO THE RETENTION AND MANAGEMENT OF INFORMATION RELATED TO
THE IMPLEMENTATION OF DIRECTORS' DUTIES
Records and proposals related to decisions by directors in the course of
their duties are collated retained and managed in compliance with applicable
laws, regulations and internal rules. Documents are kept so that they can be
retrieved and produced in response to a request from directors and corporate
auditors.
3. REGULATIONS AND OTHER STRUCTURES REGARDING RISK MANAGEMENT FOR LOSSES
(1) The occurrence of losses shall be proactively prevented based on
regulations for risk management.
(2) Should losses nevertheless arise, efforts shall be made to minimize
damage (loss) based on standards for initial reaction.
(3) In order to manage losses as a Group, comprehensively and in a unified
fashion, a
- 32 -
division responsible for integrated management will be created that
will thoroughly cover all aspects globally.
4. SYSTEMS TO ENSURE APPROPRIATE COMPLIANCE WITH LAWS, AND ARTICLES OF
INCORPORATION CONCERNING THE PERFORMANCE OF EMPLOYEE'S DUTIES
(1) In order to thoroughly implement the "Ricoh Group CSR Charter " which
sets forth the principles of corporate behavior with regard to CSR
including compliance, and the "Ricoh Group Code of Conduct" which
shows the general rules of conduct for Ricoh Group employees, the CSR
Committee is in the process of setting up a "Hot Line" for reporting
incidents and seeking advice, worldwide, and provides training. Every
effort is being made to enhance compliance domestically and overseas.
(2) Strengthening and enhancing internal controls
Efforts are being made to improve business processes and construct a
framework for standardized internal control throughout the entire
Ricoh Group, with the goal of "complying with laws, norms and internal
rules," "improvement of business effectiveness and efficiency" and
"maintaining high reliability of financial reporting," including
compliance to the section 404 of the Sarbanes-Oxley Act of 2002, and
other relevant laws and regulations.
(3) Internal auditing
An internal auditing department shall perform fair and objective
examination and evaluation of how each division is executing its
business based on legal compliance and rational criteria, and provide
advice or recommendation for improvement. .
5. SYSTEMS TO ENSURE CORRECT BUSINESS STANDARDS IN THE RICOH GROUP COMPOSED OF
THE COMPANY AND ITS AFFILIATES
Ricoh and each affiliate in the Ricoh Group shall devise a system that will
ensure the adherence to correct business standards to improve business
performance and enhance the prosperity of each Group company, while keeping
mutual respect for their independence, as follows:
(1) The Company's Board of Directors and the "Group Management Committee"
(GMC) make decisions and perform management oversight for the Ricoh
Group as a whole. To ensure the efficacy of such efforts, they
establish management regulations concerning affiliate companies, and
set up relevant administrative organizations in order to manage the
Group.
(2) The "Ricoh Group Standard" (RGS) represents a set of common rules to
be followed by the entire Group.
6. MATTERS REGARDING EMPLOYEES WHOM AUDITORS REQUEST TO ASSIST THEM IN THE
PERFORMANCE OF THEIR DUTIES
A system shall be established to assist work duties through directives from
auditors, and to select employees who shall assist the auditors in their
work.
7. MATTERS RELATED TO THE INDEPENDENCE OF AUDITORS' STAFF FROM DIRECTORS
DESCRIBED IN NO.
- 33 -
6 ABOVE
When an employee (as in No. 6 above) assists auditors in their work, he or
she shall not be subject to orders given by directors. In addition,
decisions concerning personnel assessments or personnel changes regarding
said employees shall be made only after hearing the opinions of the auditors.
8. SYSTEMS TO ENABLE DIRECTORS OR EMPLOYEES TO REPORT TO AUDITORS, AND OTHER
SYSTEMS RELATED TO REPORTING TO AUDITORS
Directors or employees shall report to auditors matters concerning laws and
regulations, as well as "important matters decided by directors which affect
the entire company," "the results of internal audits," "the status of
reporting via the internal reporting system," and "matters which auditors
have sought reports about."
9. SYSTEMS ESTABLISHED TO ENSURE THE EFFICACIOUS PERFORMANCE OF AUDITING
RESPONSIBILITIES BY AUDITORS
Auditors shall perform audits thoroughly by attending the board of directors
meetings and management meetings, receiving reports on exercise of function
from the directors and executive officers, reviewing important resolution
documents, and investigating the status of operations of divisions and group
companies.
- 34 -
REFERENCE MATERIAL FOR EXERCISING VOTING RIGHTS
1. NUMBER OF VOTING RIGHTS OF ALL SHAREHOLDERS: 723,955
2. AGENDA AND INFORMATION:
AGENDA 1: APPROVAL OF THE PROPOSED APPROPRIATION OF RETAINED EARNINGS FOR THE
FISCAL YEAR (April 1, 2005 to March 31, 2006)
The proposal for appropriation of retained earnings is described in the
attached 106th Report (see page 28).
Year-end cash dividends to shareholders for the current term will be paid at
the rate of Yen 12.00 per share, up 2 yen from a year earlier, in consideration
of our business results for the term, the strengthening of our corporate
structure and the expansion of business in the future.
Including interim cash dividends for the current term, shareholders will
earn a total of Yen 24.00 per share in cash dividends.
With regard to directors' bonuses for the period under review, we would like
to pay bonuses amounting to a total of Yen 135.7 million to the eleven
(11) directors as of the year-end, considering the Company's business
performance and other factors.
AGENDA 2: PARTIAL AMENDMENT TO THE ARTICLES OF INCORPORATION
(1) REASONS FOR CHANGE
The "Corporation Law" (2005 Law No. 86) and the "Law Concerning the
Development of Laws Related to the Enforcement of the Corporation Law" (Law
No. 87, 2005) will come into force on May 1, 2006, and accordingly we shall
make the following amendments with respect to the matters that will be allowed
under the provisions of the Articles of Incorporation.
(1) Article 10 of the Proposed Amendments (Rights Concerning Less-Than-One-Unit
Shares):
This Article sets forth the rights which the shareholders may exercise with
respect to shares of less than one unit.
(2) Article 18 of the Proposed Amendments (Disclosure and Deemed Provision of
Reference Materials for General Meeting of Shareholders via the Internet):
This Article enables the Company, in calling the general meeting of
shareholders, to disclose the reference materials for the general meeting
of shareholders and other documents by using the Internet, to make it more
convenient for our shareholders to obtain information.
(3) Article 28 of the Proposed Amendments (Omission of Resolution of Board of
Directors):
This Article enables so-called written resolution of the Board of Directors
provided for in Article 370 of the "Corporation Law" to increase the
responsiveness and efficiency of the management of the Board of Directors.
(4) Articles 30 (Exemption of Liability of Outside Directors) and 39 (Exemption
of Liability of Outside Corporate Auditors) of the Proposed Amendments:
These Articles are enable the Company to enter into an agreement regarding
limitation of
- 35 -
liability with outside directors and outside corporate auditors so that the
Company can continue to invite highly independent and skilled people who
are suitable for the position of an outside director and outside corporate
auditor. All members of the Board of Auditors have already approved the
proposed amendment in Article 30.
(5) Articles 4 (Organizations) and 7 (Issue of Share Certificates) of the
Proposed Amendments are newly established with respect to the matters for
which new provisions must be made in the Articles of Incorporation pursuant
to the provision of the Corporation Law.
(6) Necessary amendments are made to use the clauses quoted from the
Corporation Law and the terms amended under the Corporation Law, in
addition to partial amendments of expression, correction of phrases and
adjusting article numbers with addition and subtraction of articles.
- 36 -
(2) DETAILS OF AMENDMENTS TO THE ARTICLES OF INCORPORATION:
The details of amendments are as follows:
(Underlined portions indicate the changes.)
=================================
Current Articles of Incorporation ===================================
Proposed provisions after amendment
================================= ===================================
CHAPTER I. GENERAL PROVISIONS CHAPTER I. GENERAL PROVISIONS
(Trade Name) (Trade Name)
Article 1. The name of the Article 1. The name of the Company
Company is Kabushiki Kaisha Ricoh is Kabushiki Kaisha Ricoh and is
and is written RICOH COMPANY, LTD. expressed RICOH COMPANY, LTD. in
------- ---------
in English. English.
(Location of Head Office) (Unchanged)
-------------------------
Article 2. The head office of the
Company is to be located in Ohta-ku,
Tokyo.
(Objectives) (Unchanged)
------------
Article 3. The objectives of the
Company are to engage in the
following businesses:
1. - 9. (Omitted)
(Newly established) (Organizations)
---------------
Article 4. In addition to the
-----------------------------
general meeting of shareholders
-------------------------------
and directors, the Company shall
--------------------------------
establish the following
-----------------------
organizations:
--------------
i) Board of Directors;
----------------------
ii) Corporate Auditors;
-----------------------
iii) Board of Corporate
-----------------------
Auditors; and
-------------
iv) Accounting Auditors.
------------------------
(Public Notices) (Method of Public Notices)
----------
Article 4. Public notices of the Article 5. Public notices of the
-- --
Company shall appear in the Nihon Company shall appear in the Nihon
Keizai Shimbun published in Tokyo. Keizai Shimbun.
------------------
CHAPTER II. SHARES CHAPTER II. SHARES
(Total Number of Shares to be (Total Number of Issuable shares)
------------ ---------------
Issued and Types of Share
-------------------------
Certificates)
-------------
Article 5. The total number of Article 6. The total number of
- -
shares to be issued by the Company issuable shares by the Company is
------------------- ---------------
is one billion and five hundred one billion and five hundred million
million (1,500,000,000) shares. If (1,500,000,000) shares. (Deleted)
--
any shares are cancelled, the
-----------------------------
number of shares so cancelled shall
-----------------------------------
be deducted from the total number
---------------------------------
of shares to be issued.
-----------------------
- 37 -
================================= ===================================
Current Articles of Incorporation Proposed provisions after amendment
================================= ===================================
2. The types of share (Deleted)
---------------------
certificates to be issued by the
--------------------------------
Company shall be subject to the
-------------------------------
Share Handling Regulations
--------------------------
established by the Board of
---------------------------
Directors.
----------
(Newly established) (Issuance of Share Certificates)
--------------------------------
Article 7. The Company shall issue
----------------------------------
share certificates for the shares.
----------------------------------
(Purchase of Treasury Stocks) (Purchase of Treasury Stocks)
Article 6. The Company may Article 8. The Company may acquire
- - -------
purchase the shares of its own stocks the shares of its own stocks by a
-------- resolution of the Board of Directors
by a resolution of the Board of pursuant to Paragraph 2, Article 165
Directors pursuant to Paragraph 1, ------------------------
------------ of the Corporation Law.
Item 2 of Article 211-3 of the -----------------------
------------------------------
Commercial Code.
----------------
(Number of Shares Constituting One (Number of Shares Constituting One
Unit and Non-Issuance of Certificates Unit and Non-Issuance of Certificates
for Less-Than-One-Unit Shares) for Less-Than-One-Unit Shares)
Article 7. The number of shares Article 9.
- -
constituting one unit of shares of the 1. The number of shares
Company shall be one thousand --
(1,000) shares. constituting one unit of shares of the
Company shall be one thousand (1,000)
shares. (Small change in Japanese)
2. The Company shall not issue any 2. Notwithstanding the provisions
certificates for shares constituting ------------------------------
------------------- of Article 7, the Company shall not
less than one unit of shares -------------
---------------------------- issue any certificates for
(hereinafter referred to as less-than-one-unit shares, unless
--------------------------- --------------------------
"less-than-one-unit shares"), unless otherwise provided for in the Share
----------------------------- Handling Regulations.
otherwise provided for in the Share
Handling Regulations.
(Newly established) (Rights Concerning Less-Than-One-Unit
-------------------------------------
Shares)
-------
Article 10. A shareholder
-------------------------
(including the beneficial shareholder;
--------------------------------------
the same applies hereinafter) of the
------------------------------------
Company shall not exercise any rights
-------------------------------------
other than those described below with
-------------------------------------
respect to the less-than-one-unit
---------------------------------
shares held by it.
------------------
i) Right described in each Item
-------------------------------
of Paragraph 2, Article 189
----------------------------
of the Corporation Law.
-----------------------
ii) Right to make a request under
---------------------------------
the provision of Paragraph 1,
-----------------------------
Article 166 of the Corporation
------------------------------
Law.
----
iii) Right to receive allocation
---------------------------
of offered shares and
---------------------
allocation of offered stock
---------------------------
purchase warrants in
--------------------
accordance with the number of
-----------------------------
shares held by the
------------------
shareholder.
------------
iv) Right to make a request
---------------------------
provided for in the following
-----------------------------
Article.
--------
- 38 -
================================= ===================================
Current Articles of Incorporation Proposed provisions after amendment
================================= ===================================
(Sale of Shares Constituting (Sale of Shares Constituting
Less-Than-One-Unit Shares to Less-Than-One-Unit Shares to
Constitute One Unit) Constitute One Unit)
Article 8. A shareholder Article 11. A shareholder of the
- --
(including the beneficial Company may request that the Company
------------------------- sell such number of shares as may,
shareholder; the same applies together with the number of
----------------------------- ---
hereinafter) who holds less-than-one-unit shares held by
---------------------- -------
less-than-one-unit shares of the the shareholder, constitute one unit
------------------------- ---------------
Company, may request that the Company of shares, in accordance with the
sell such number of shares as may, Share Handling Regulations.
together with such number of
----
less-than-one-unit shares, constitute
one unit of shares, in accordance with
the Share Handling Regulations.
(Transfer Agent) (Custodian of Register of Shareholders)
---------------- --------------------------------------
Article 9. The Company shall have Article 12.
- --
a transfer agent for its shares. 1. The Company shall have a
-------------------------------- - -
custodian of the register of
----------------------------
shareholders.
-------------
2. The transfer agent and its 2. The custodian of the register
------------------ -----------------------------
business office shall be determined by of shareholders and its business
resolution of the Board of Directors ---------------
and public notice shall be given office shall be determined by
thereof. resolution of the Board of Directors
and public notice shall be given
thereof.
3. The register of shareholders 3. The register of shareholders
(including the register of beneficial (including the register of beneficial
shareholders; the same applies shareholders; the same
hereinafter) and the register of the applies hereinafter), the register
lost share certificates ------------
of the Company shall be of stock purchase warrants and the
kept at the business office of the --------------------------
---------------------------------- register of the lost share
transfer agent. All business certificates of the Company shall be
---------------------------- prepared and kept, and all other
pertaining to the shares of the --------------------------------
------------------------------- business pertaining to the register
Company, such as the registration of -----------------------------------
------------------------------------ of shareholders, the register of
a transfer of shares and the --------------------------------
---------------------------- stock purchase warrants and the
purchase and sale of -------------------------------
-------------------- register of the lost share
less-than-one-unit shares, shall be --------------------------
----------------------------------- certificates shall be handled by the
handled by the transfer agent and ------------------------------------
----------------------------- custodian of the register of
not by the Company. ----------------------------
shareholders and not by the Company.
------------
(Share Handling Regulations) (Share Handling Regulations)
Article 10. The registration of a Article 13. The business and the
-- ---------------------- -- --------------------
transfer of shares, the registration service changes pertaining to the
------------------------------------ ---------------
of the lost share certificates, the shares of the Company shall be
----------------------------------- subject to laws, ordinances or these
purchase and sale of -------------------------
-------------------- Articles of Incorporation and the
less-than-one-unit shares by the -----------------------------
-------------------------------- Share Handling Regulations established
Company, and other business by the Board of Directors.
---------------------------
pertaining to the shares of the
Company shall be subject to the Share
Handling Regulations established by
the Board of Directors.
- 39 -
================================= ===================================
Current Articles of Incorporation Proposed provisions after amendment
================================= ===================================
(Record Date) (Deleted)
-------------
Article 11. The Company shall deem the
--------------------------------------
shareholders (including the beneficial
--------------------------------------
shareholders; the same applies
------------------------------
hereinafter) appearing or recorded in
-------------------------------------
the final register of shareholders as
-------------------------------------
of the accounts closing date for each
-------------------------------------
business year to be the shareholders
------------------------------------
entitled to exercise the shareholders'
-------------------------------------
rights at the ordinary general meeting
--------------------------------------
of shareholders concerning such
-------------------------------
business year.
--------------
2. In addition to the preceding
-------------------------------
paragraph, whenever necessary, upon
-----------------------------------
giving prior public notice in
-----------------------------
accordance with the resolution of the
-------------------------------------
Board of Directors, the Company may
-----------------------------------
deem the shareholders or registered
-----------------------------------
pledgees appearing or recorded in the
-------------------------------------
register of shareholders as of a
--------------------------------
certain fixed date to be the
----------------------------
shareholders or registered pledgees
-----------------------------------
entitled to exercise their rights.
----------------------------------
CHAPTER III. GENERAL MEETING OF CHAPTER III. GENERAL MEETING OF
SHAREHOLDERS SHAREHOLDERS
(Calling of Meeting) (Calling of Meeting)
Article 12. The ordinary general Article 14.
-- --
meeting of shareholders shall be (Unchanged)
called in June each year and an
extraordinary general meeting of
shareholders shall be called as the
necessity arises.
2. A general meeting of shareholders (Deleted)
------------------------------------
shall be called by a Representative
-----------------------------------
Director previously appointed by the
------------------------------------
resolution of the Board of Directors.
-------------------------------------
3. In the event that the (Deleted)
------------------------
Representative Director as appointed
------------------------------------
above is unable to act, one of the
----------------------------------
other directors shall call such
-------------------------------
meeting in the order determined in
----------------------------------
advance by resolution of the Board of
-------------------------------------
Directors.
----------
(Newly established) (Record Date of General Meeting of
----------------------------------
Shareholders)
-------------
Article 15. The record date of
------------------------------
voting rights for the Company's
-------------------------------
general meeting of shareholders
-------------------------------
shall be March 31 every year.
-----------------------------
- 40 -
===================================== ===================================
Current Articles of Incorporation Proposed provisions after amendment
===================================== ===================================
(Exercise of Voting Rights by Proxy) (Exercise of Voting Rights by Proxy)
Article 13. A shareholder may Article 16.
-- --
exercise his voting rights by proxy 1. A shareholder may exercise his
who shall be another shareholder of voting rights by proxy who shall be
the Company entitled to vote. another shareholder of the Company
----------------- that has voting rights.
-----------------------
2. Such shareholder or proxy shall 2. Such shareholder or proxy shall
submit a power of attorney to the submit a document certifying the
Company. -----------------------
power of attorney to the Company for
---
each general meeting of shareholders.
-------------------------------------
(Chairman) (Person with the Right to Call the
----------------------------------
Meeting and Chairman)
-----------
Article 14. A Representative Article 17.
---------------------------- -----------
Director previously appointed by 1. A meeting of the shareholders
-------------------------------- --------------------------------
resolution of the Board of Directors shall be called and presided over by
------------------------------------ ------------------------------------
shall preside over a general meeting a Representative Director previously
------------------------------------ ------------------------------------
of shareholders. In the event that appointed by the Board of Directors.
---------------------------------- ------------------------------------
the Representative Director is unable 2. In case the Representative
------------------------------------- -----------------------------
to act, one of the other directors Director is unable to act, one of the
---------------------------------- -------------------------------------
shall act in his place in the order other directors shall call and
----------------------------------- ------------------------------
determined in advance by resolution preside over the meeting of the
----------------------------------- -------------------------------
of the Board of Directors. shareholders in accordance with the
-------------------------- -----------------------------------
order determined in advance by
------------------------------
resolution of the Board of Directors.
-------------------------------------
(Newly established) (Disclosure and Deemed Provision of
-----------------------------------
Reference Materials for General
-------------------------------
Meeting of Shareholders via the
-------------------------------
Internet)
---------
Article 18. In calling the general
----------------------------------
meeting of shareholders, the Company
------------------------------------
may deem that the information
-----------------------------
regarding the matters which should be
-------------------------------------
described or shown in the reference
-----------------------------------
materials for the general meeting of
------------------------------------
shareholders, business reports,
-------------------------------
financial documents and consolidated
------------------------------------
financial documents have been
-----------------------------
provided to the shareholders by
-------------------------------
disclosing them via the Internet in
-----------------------------------
accordance with the Ministerial
-------------------------------
Ordinance of the Ministry of Justice.
-------------------------------------
(Method of Adopting Resolutions) (Method of Adopting Resolutions)
Article 15. Except as otherwise Article 19.
-- --
provided for in laws, ordinances or 1. Except as otherwise provided
these Articles of Incorporation, --
resolutions at a general meeting of for in laws, ordinances or these
shareholders shall be adopted by a Articles of Incorporation,
majority of the votes of the resolutions at a general meeting of
shareholders present thereat. shareholders shall be adopted by a
majority of the votes of the
shareholders present thereat who
---
are entitled to vote.
---------------------
2. Special resolutions provided 2. Resolutions provided for in
------- Paragraph 2, Article 309 of the
for in Article 343 of the Commercial -------------------------------
----------------------------- Corporation Law shall be adopted by
Code shall be adopted by the vote of ---------------
---- the vote of the shareholders not less
the shareholders not less than than two-thirds (2/3) of those
two-thirds (2/3) of those present at present at the meeting whereby not
the meeting whereby one-third ---
(1/3) of voting rights of all the less than one-third (1/3) of voting
--- ---------
shareholders shall constitute a rights of the shareholders entitled
quorum. --------
to exercise voting rights shall
-------------------------
constitute a quorum.
- 41 -
======================-=========== ===================================
Current Articles of Incorporation Proposed provisions after amendment
======================-=========== =======================-===========
(Minutes) (Minutes)
Article 16. The proceedings in Article 20. The proceedings in
-- --
outline and the resultant actions outline, the resultant actions taken
taken at a general meeting of and other matters subject to
shareholders shall be entered in the ----------------------------
minutes, which shall bear the names laws and ordinances at a general
and seals of the chairman of the -------------------
meeting and the directors present and meeting of shareholders shall be
shall be kept by the Company. entered in the minutes, which shall
bear the names and seals of the
chairman of the meeting and the
directors present and shall be kept by
the Company.
CHAPTER IV. DIRECTORS AND BOARD OF CHAPTER IV. DIRECTORS AND BOARD OF
DIRECTORS DIRECTORS
(Number) (Number)
Article 17. The Company shall have Article 21. The Company shall have
-- --
not more than fifteen (15) directors. not more than fifteen (15) directors.
(Small change in Japanese)
(Election) (Election)
Article 18. Directors shall be Article 22.
-- --
elected at a general meeting of 1. (Unchanged)
shareholders. --
2. Resolutions for the election under 2. Resolutions for the election
----- of directors shall be adopted by a
the preceding paragraph shall be ------------
----------------------- majority of the votes of the
adopted by a majority of the votes of shareholders present who hold not less
the shareholders present who hold not than one-third (1/3) of the voting
less than one-third (1/3) of the rights of the shareholders entitled
voting rights of all the --------
--- to exercise voting rights.
shareholders. -------------------------
3. Cumulative voting shall not be used 3. (Unchanged)
for the adoption of resolutions for
the election of directors.
(Term of Office) (Term of Office)
Article 19. The term of office of Article 23.
-- --
directors shall be until the close of 1. The term of office of directors
the ordinary general meeting of --
shareholders relating to the last shall be until the close of the
accounts closing date occurring within ordinary general meeting of
------------------------------- shareholders relating to the last
two (2) years after their assumption fiscal year ending within two (2)
---------- years after their election.
of office; provided, however, that the 2. The term of office of a
-------------------------------------- --------------------------
term of office of a director elected director elected to fill a vacancy
------------------------------------ ----------------------------------
to fill a vacancy or by reason of of a director who has resigned
--------------------------------- ------------------------------
an increase in the number of directors before the completion of his/her
-------------------------------------- --------------------------------
shall be for the remaining balance of term, or elected to increase the
------------------------------------- --------------------------------
the term of office of the other number of directors, shall be for
------------------------------- ---------------------------------
directors currently in office. the remaining balance of the term
------------------------------ ---------------------------------
of office of the other directors
--------------------------------
currently in office.
--------------------
- 42 -
================================= ===================================
Current Articles of Incorporation Proposed provisions after amendment
================================= ===================================
(Filling of Vacancy) (Deleted)
--------------------
Article 20. In the event of any
-------------------------------
vacancy occurring in the office of
----------------------------------
directors, no election to fill such
-----------------------------------
vacancy may be held, if the number of
-------------------------------------
the remaining directors is not short
------------------------------------
of the statutory number.
------------------------
(Representative Directors) (Representative Directors)
Article 21. One (1) or more Article 24. Representative
-- --------------- --
representative directors shall be Directors shall be elected by
appointed by resolution of the Board -------
--------- resolution of the Board of Directors.
of Directors.
(Calling of Meetings of Board of (Person with the Right to Call the
-------------------------------- ----------------------------------
Directors; Chairman; Resolutions) Meeting of Board of Directors and
--------------------------------- ---------------------------------
Article 22. The Board of Directors Chairman)
-- ---------------------- ---------
shall decide important matters Article 25.
------------------------------ --
concerning the execution of business (Deleted)
------------------------------------ 1. A meeting of the Board of
and affairs of the Company as well as ----------------------------
------------------------------------- Directors shall be called and presided
such matters as are provided for in --------------------------------------
----------------------------------- over by a Director previously
laws and ordinances. -----------------------------
-------------------- appointed by the Board of Directors.
------------------------------------
2. A meeting of the Board of 2. In case the Director is unable
------------------------- to act, one of the other directors
Directors shall be called and presided shall call and preside over the
-------------------------------------- -------------------------
over by a Director previously meeting of the Board of Directors in
----------------------------- ------------------------------------
appointed by the Board of Directors. accordance with the order determined
------------------------------------ ---------------
In case the Director is unable to act, in advance by resolution of the Board
one of the other directors shall act of Directors.
in his place in the order determined
------------
in advance by resolution of the Board
of Directors.
3. Notice of a meeting of the (Deleted)
-----------------------------
Board of Directors shall be dispatched
--------------------------------------
to each director and each corporate
-----------------------------------
auditor three (3) days before the date
--------------------------------------
of the meeting; provided, however,
----------------------------------
that such meeting may be held without
-------------------------------------
going through the procedure for
-------------------------------
calling if so agreed by all the
-------------------------------
directors and the corporate auditors.
-------------------------------------
4. Resolutions at a meeting of the (Deleted)
----------------------------------
Board of Directors shall be adopted by
--------------------------------------
a majority of the directors present
-----------------------------------
who shall constitute a majority of the
--------------------------------------
total number of directors.
--------------------------
(Newly established)
(Calling Meetings of Board of
-----------------------------
Directors)
----------
Article 26.
-----------
1. Notice of a meeting of the
-----------------------------
Board of Directors shall be dispatched
--------------------------------------
to each director and each corporate
-----------------------------------
auditor three (3) days before the date
--------------------------------------
of the meeting; provided, however,
----------------------------------
that such period may be shortened in
------------------------------------
case of emergency.
------------------
2. A meeting of the Board of
----------------------------
Directors may be held without going
-----------------------------------
through the procedure for calling, if
-------------------------------------
so agreed by all the directors and the
--------------------------------------
corporate auditors.
-------------------
- 43 -
============================================ ==========================================
Current Articles of Incorporation Proposed provisions after amendment
============================================ ==========================================
(Newly established) (Resolutions of Meetings of Board of
------------------------------------
Directors)
----------
Article 27.
-----------
1. The Board of Directors shall
-------------------------------
decide important matters concerning
-----------------------------------
the execution of business and affairs
-------------------------------------
of the Company as well as such matters
--------------------------------------
as are provided for in laws and
-------------------------------
ordinances.
-----------
2. Resolutions at a meeting of the
----------------------------------
Board of Directors shall be adopted by
--------------------------------------
a majority of the directors present
-----------------------------------
who shall constitute a majority of the
--------------------------------------
total number of directors.
--------------------------
(Newly established) (Omission of Resolution of Board of
-----------------------------------
Directors)
----------
Article 28. The Company shall deem
----------------------------------
that the resolution of the Board of
-----------------------------------
Directors has been adopted if the
---------------------------------
requirements under Article 370 of the
-------------------------------------
Corporation Law are satisfied.
------------------------------
(Remuneration) (Remuneration and other interests)
--------------------
Article 23. Remuneration of directors Article 29. Remuneration and bonus
-- --------- -- ----------
shall be determined by resolution at a of directors and other property
general meeting of shareholders. -------------------------------
interests received by the directors
-----------------------------------
from the Company in consideration of
------------------------------------
the performance of their duties
-------------------------------
(hereinafter referred to as the
-------------------------------
"Remuneration") shall be determined by
---------------
resolution at a general meeting of
shareholders.
(Newly established) (Exemption of Liability of Outside
----------------------------------
Directors)
----------
Article 30. The Company may enter
---------------------------------
into an agreement with outside
------------------------------
directors under which their liability
-------------------------------------
for damages due to the failure in
---------------------------------
performing their duties shall
-----------------------------
be limited in accordance with the
---------------------------------
provisions of Paragraph 1, Article 427
--------------------------------------
of the Corporation Law; provided,
---------------------------------
however, that the limit of liability
------------------------------------
under such agreement shall be the
---------------------------------
higher of the predetermined amount of
-------------------------------------
not less than ten million (10,000,000)
--------------------------------------
yen, or the amount provided for under
-------------------------------------
the laws and ordinances.
------------------------
CHAPTER V. CORPORATE AUDITORS CHAPTER V. CORPORATE AUDITORS
AND BOARD OF CORPORATE AUDITORS AND BOARD OF CORPORATE AUDITORS
(Number) (Number)
Article 24. The Company shall have Article 31. The Company shall have
-- --
not more than five (5) corporate not more than five (5) corporate
auditors. auditors. (Small change in Japanese)
- 44 -
============================================ ============================================
Current Articles of Incorporation Proposed provisions after amendment
============================================ ============================================
(Election)
(Election)
Article 25. Corporate auditors Article 32.
-- --
shall be elected at a general meeting 1. (Unchanged)
of shareholders. --
2. Resolutions for the election 2. Resolutions for the election
under the preceding paragraph shall be of corporate auditors shall be adopted
----------------------------- -------------------
adopted by a majority of the votes of by a majority of the votes of the
the shareholders present who hold not shareholders present who hold not less
less than one-third (1/3) of the than one-third (1/3) of the voting
voting rights of all the shareholders. rights of the shareholders entitled
--- --------
to exercise voting rights.
--------------------------
(Term of Office) (Term of Office)
Article 26. The term of office of Article 33.
-- --
corporate auditors shall beuntil 1. The term of office of corporate
the close of the ordinary general --
meeting of shareholders relating to auditors shall be until the close of
the last accounts closing date the ordinary general meeting of
--------------------- shareholders relating to the last
occurring within four (4) years after fiscal year ending within four (4)
--------- ------------------
their assumption of office; provided, years after their assumption of office.
--------- 2. The term of office of a
however, that the term of office of a --------------------------
------------------------------------- corporate auditor elected to fill a
corporate auditor elected to fill a -----------------------------------
----------------------------------- vacancy of an auditor resigned
vacancy shall be for the remaining ------------------------------
---------------------------------- before the completion of the term
balance of the term of office of the ---------------------------------
------------------------------------ shall be for the remaining balance of
retired corporate auditor. -------------------------------------
-------------------------- the term of office of the retired
---------------------------------
corporate auditor.
------------------
(Filling of Vacancy) (Deleted)
--------------------
Article 27. In the event of any
-------------------------------
vacancy occurring in the office of
----------------------------------
corporate auditors, no election to
----------------------------------
fill such vacancy may be held, if the
-------------------------------------
number of the remaining corporate
---------------------------------
auditors is not short of the statutory
--------------------------------------
number.
-------
- 45 -
================================= ===================================
Current Articles of Incorporation Proposed provisions after amendment
================================= ===================================
(Calling of Meetings of Board of (Person with the Right to Call the
------------------- -----------------------------------
Corporate Auditors; Resolutions) Meeting of Board of Corporate Auditors)
----------- -------
Article 28. The Board of Corporate Article 34.
-- ---------------------- --
Auditors shall decide matters (Deleted)
-----------------------------
concerning the audit policy, the
--------------------------------
methods for investigating the state of
--------------------------------------
the business and property and the
---------------------------------
execution of other duties of corporate
--------------------------------------
auditors as well as such matters as
-----------------------------------
are provided for in laws and
----------------------------
ordinances.
-----------
2. A meeting of the Board of A meeting of the Board of Corporate
- Auditors shall be called by each
Corporate Auditors shall be called by corporate auditor.
each corporate auditor.
3. Notice of a meeting of the Board (Deleted)
-----------------------------------
of Corporate Auditors shall be
------------------------------
dispatched to each corporate auditor
------------------------------------
three (3) days before the date of the
-------------------------------------
meeting; provided, however, that such
-------------------------------------
meeting may be held without going
---------------------------------
through the procedure for calling if
------------------------------------
so agreed by all the corporate
------------------------------
auditors.
---------
4. Except as otherwise provided for (Deleted)
-----------------------------------
in laws or ordinances, resolutions at
-------------------------------------
a meeting of the Board of Corporate
-----------------------------------
Auditors shall be adopted by a
------------------------------
majority of the corporate auditors.
-----------------------------------
(Newly established) (Calling Meetings of Board of
----------------------------
Corporate Auditors)
------------------
Article 35.
-----------
1. Notice of a meeting of the Board
-----------------------------------
of Corporate Auditors shall be
------------------------------
dispatched to each corporate auditor
------------------------------------
three (3) days before the date of the
-------------------------------------
meeting; provided, however, that such
-------------------------------------
period may be shortened in case of
----------------------------------
emergency.
----------
2. A meeting of the Board of
----------------------------
Corporate Auditors may be held without
--------------------------------------
going through the procedure for
-------------------------------
calling, if so agreed by all the
--------------------------------
corporate auditors.
-------------------
(Resolutions of Meetings of Board of
(Newly established) -----------------------------------
Corporate Auditors)
------------------
Article 36.
-----------
1. The Board of Corporate Auditors
----------------------------------
shall decide matters concerning the
-----------------------------------
audit policy, the methods for
-----------------------------
investigating the state of the
------------------------------
business and property and the
-----------------------------
execution of other duties of corporate
--------------------------------------
auditors as well as such matters as
-----------------------------------
are provided for in laws and
----------------------------
ordinances.
-----------
2. Except as otherwise provided for
--------------------------------------
in laws or ordinances, resolutions at
-------------------------------------
a meeting of the Board of Corporate
-----------------------------------
Auditors shall be adopted by a
------------------------------
majority of the corporate auditors.
-----------------------------------
- 46 -
================================= ===================================
Current Articles of Incorporation Proposed provisions after amendment
================================= ===================================
(Full-Time Corporate Auditor) (Full-Time Corporate Auditor)
Article 29. The corporate auditors Article 37. A full-time corporate
---------------------------------- ---------------------------------
shall appoint a full-time corporate auditor or auditors shall be elected
----------------------------------- ------------------------------------
auditor or auditors from among their by resolution of the Board of
------------------------------------ -----------------------------
number. Corporate Auditors.
------- -------------------
(Remuneration) (Remuneration and other interests)
Article 30. Remuneration of corporate Article 38. Remuneration and other
-- -- -----
auditors shall be determined by interests of corporate auditors shall
resolution at a general meeting of ---------
shareholders. be determined by resolution at a
general meeting of shareholders.
(Newly established) (Exemption of Liability of Outside
----------------------------------
Corporate Auditors)
-------------------
Article 39. The Company may enter
---------------------------------
into an agreement with outside
------------------------------
corporate auditors under which their
------------------------------------
liability for damages due to the
--------------------------------
failure in performing their duties
----------------------------------
shall be limited in accordance with
-----------------------------------
the provisions of Paragraph 1, Article
--------------------------------------
427 of the Corporation Law; provided,
-------------------------------------
however, that the limit of liability
------------------------------------
under such agreement shall be the
---------------------------------
higher of the predetermined amount not
--------------------------------------
less than five million (5,000,000)
----------------------------------
yen, or the amount provided for under
-------------------------------------
the laws or regulations.
------------------------
CHAPTER VI. ACCOUNTS CHAPTER VI. ACCOUNTS
(Business Year; Accounts Closing Date) (Fiscal Year)
------------------------------------ -----------
Article 31. The business year of Article 40. The fiscal year of the
-- -------- -- ------
the Company shall be from April 1 of Company shall be one year from April 1
each year to March 31 of the following --------
year and the last day of each business of each year to March 31 of the
--------------------------------- following year.
year shall be the accounts closing
----------------------------------
date.
-----
(Dividends) (Record Date for Dividends at Fiscal
----------- ------------------------------------
Year End)
---------
Article 32. Dividends shall be Article 41. The record date for the
-- ------------------ -- -----------------------
paid to the shareholders and dividends to be paid by the Company at
---------------------------- --------------------------------------
registered pledgees appearing or the end of fiscal year shall be March
-------------------------------- -------------------------------
recorded in the final register of 31 of each year.
---------------------------------
shareholders as of March 31 of each
------------------
year.
(Interim Dividends) (Interim Dividends)
Article 33. The Company may, by Article 42. The Company may, by
-- --
resolution of the Board of Directors, resolution of the Board of Directors,
make cash distribution as provided for pay interim dividends by regarding
-------------------------------------- ----------------------------------
in Article 293-5 of the Commercial September 30 of each year as the
---------------------------------- ------
Code of Japan ("interim dividends") to record date.
-------------------------------------- -----------
the shareholders or registered
------------------------------
pledgees appearing or recorded in the
-------------------------------------
final register of shareholders as of
------------------------------------
September 30 of each year.
- 47 -
========================================= ========================================
Current Articles of Incorporation Proposed provisions after amendment
========================================= ========================================
(Period of Limitations) (Period of Limitations for Dividends)
Article 34. The Company shall be Article 43. The Company shall be
-- --
relieved from the obligation to pay relieved from the obligation to pay
any dividend or interim dividend if any property available for
---------------------------- ----------------------
such any dividend or interim dividend distribution if such property
-------------------------------- ------------ --------
remains unreceived after the lapse of available for distribution is cash and
three (3) full years from the date on --------------------------------------
which the same became due and payable. still remains unreceived after the
-----
lapse of three (3) full years from the
date on which the same became due and
payable.
- 48 -
AGENDA 3: ELECTION OF ELEVEN (11) DIRECTORS
As the tenure of office of ten (10) directors will expire at the end of this
General Meeting of Shareholders, the Company proposes the appointment of eleven
(11) directors at this meeting.
The candidates for directors are as follows:
Brief personal profile
(the other company's name and
position thereof when the
candidate is a representative Number of the
Name director ofother company, with Company's
No. (Date of birth) an asterisk) shares held
--- ------------------- --------------------------------------- -------------
1 Masamitsu Sakurai Apr. 1966 Joined the Company 9,000
(January 8, 1942) May 1984 President, Ricoh UK Products
Ltd.
Jun. 1992 Director of the Company
Apr. 1993 President, Ricoh Europe B.V.
Jun. 1994 Managing Director of the
Company
Apr. 1996 President and Representative
Director of the Company
Mar. 2005 * Chairman, Coca-Cola West
Japan Co., Ltd. (to date)
Jun. 2005 Representative Director of
the Company (to date)
President of the Company (to
date)
Chairman of the Board of the
Company (to date)
CEO (Chief Executive Officer)
(to date)
------------------------------------------------------------------------------
2 Koichi Endo Apr. 1966 Joined the Company 13,747
(February 16, 1944) Apr. 1987 President, Ricoh Electronics,
Inc.
Jun. 1992 Director of the Company
Jun. 1997 Managing Director of the
Company
Jun. 2000 Executive Managing Director
of the Company
Executive Vice President of
the Company
Apr. 2004 General Manager, Fact Base
Management Innovation Office
(to date)
Jun. 2005 Director of the Company (to
date)
Corporate Executive Vice
President of the Company (to
date)
CINO (Chief Innovation
Officer) (to date)
Apr. 2006 CSO (Chief Strategy Officer)
(to date)
------------------------------------------------------------------------------
3 Masayuki Matsumoto Apr. 1970 Joined the Company 4,000
(December 10, 1944) Jul. 1993 Manager, Tokyo Branch,
Imaging Equipment Marketing
Division, Marketing Group
Jun. 1994 Director of the Company
Jan. 1996 Deputy General Manager,
Marketing Division
Oct. 1998 Managing Director of the
Company
General Manager, Marketing
Group
Jun. 2000 Executive Vice President of
the Company
Jun. 2002 Executive Managing Director
of the Company
Apr. 2005 General Manager, Corporate
Social Responsibility
Division (to date)
Jun. 2005 Director of the Company (to
date)
Corporate Executive Vice
President of the Company (to
date)
CMO (Chief Marketing Officer)
(Japan) (to date)
------------------------------------------------------------------------------
- 49 -
Brief personal profile
(the other company's name and
position thereof when the
candidate is a representative Number of the
Name director ofother company, with Company's
No. (Date of birth) an asterisk) shares held
--- ------------------- ---------------------------------------- -------------
4 Katsumi Yoshida Apr. 1967 Joined the Company
(August 20, 1944) Oct. 1990 President, Ricoh Electronics,
Inc.
Feb. 1996 Vice Chairman, Ricoh
Corporation
Apr. 2000 President, Ricoh Corporation 5,100
Apr. 2001 Executive Vice President of
the Company
Jun. 2002 Managing Director of the
Company
Oct. 2003 General Manager,
International Marketing Group
* Chairman, Ricoh China Co.,
Ltd. (to date)
Jun. 2005 Director of the Company (to
date)
Corporate Executive Vice
President of the Company (to
date)
CMO (Chief Marketing Officer)
(overseas) (to date)
Apr. 2006 In charge of Office Business
Strategic Planning (to date)
------------------------------------------------------------------------------
5 Takashi Nakamura Apr. 1972 Joined the Company
(September 2, 1946) Apr. 1990 President, Ricoh UK Products
Ltd.
Jan. 1995 President, Ricoh Europe B.V.
Jun. 1998 Director of the Company
Jun. 2000 Senior Vice President of the
Company
Jun. 2002 President, Ricoh Elemex 6,693
Corporation
Jun. 2004 Managing Director of the
Company
Jun. 2005 Director of the Company (to
date)
In charge of Legal Affairs
and Intellectual Property (to
date)
Jan. 2006 Corporate Executive Vice
President of the Company (to
date)
CHO (Chief Human Resource
Officer) (to date)
CPO (Chief Production
Officer) (to date)
------------------------------------------------------------------------------
6 Shiro Kondoh Apr. 1973 Joined the Company
(October 7, 1949) Jul. 1999 Deputy General Manager,
Imaging System Business Group
Jun. 2000 Senior Vice President of the
Company
Oct. 2000 General Manager, Imaging
System Business Group
Jun. 2002 Executive Vice President of 5,000
the Company
Jun. 2003 Managing Director of the
Company
Oct. 2004 In charge of Imaging Engine
Solution Development (to date)
General Manager, MFP Business
Group (to date)
Jun. 2005 Director of the Company (to
date)
Corporate Executive Vice
President of the Company (to
date)
------------------------------------------------------------------------------
- 50 -
Brief personal profile
(the other company's name and
position thereof when the
candidate is a representative Number of the
Name director ofother company, with Company's
No. (Date of birth) an asterisk) shares held
--- ------------------- ---------------------------------------- -------------
7 Kazunori Azuma Apr. 1971 Joined the Company 6,000
(February 11, 1949) Oct. 2000 President, Ricoh Technosystems
Co., Ltd.
Jun. 2003 Managing Director of the
Company
Executive Vice President of
the Company
In charge of Domestic Sales
Planning
Oct. 2003 Chairman, Ricoh Technosystems
Co., Ltd.
Nov. 2003 General Manager, Marketing
Group (to date)
Jun. 2005 Director of the Company (to
date)
Corporate Executive Vice
President of the Company (to
date)
------------------------------------------------------------------------------
8 Zenji Miura Apr. 1976 Joined the Company 6,000
(January 5, 1950) Jan. 1993 President, Ricoh France S.A.
Oct. 2000 Senior Vice President of the
Company
General Manager, Finance and
Accounting Division
Jun. 2003 Executive Vice President of
the Company
Jun. 2004 Managing Director of the
Company
Jun. 2005 Director of the Company (to
date)
Corporate Executive Vice
President of the Company (to
date)
CFO (Chief Financial Officer)
(to date)
In charge of IR (to date)
Apr. 2006 CIO (Chief Information
Officer) (to date)
In charge of Corporate
Communication and Management
of Group Companies (to date)
General Manager, Corporate
Planning Division (to date)
------------------------------------------------------------------------------
9 Kiyoshi Sakai Apr. 1970 Joined the Company 5,000
(December 25, 1945) Apr. 1994 General Manager, IPS Business
Division, Imaging System
Business Group
Jan. 1996 General Manager, Corporate
Planning Division
Jun. 1996 Director of the Company
Apr. 1999 General Manager, Research &
Development Group
Jun. 2000 Senior Vice President of the
Company
Jun. 2002 Managing Director of the
Company
Executive Vice President of
the Company
Jun. 2005 Corporate Senior Vice
President of the Company (to
date)
Apr. 2006 In charge of Research &
Development and Corporate
Environment (to date)
------------------------------------------------------------------------------
- 51 -
Brief personal profile
(the other company's name and
position thereof when the
candidate is a representative Number of the
Name director ofother company, with an Company's
No. (Date of birth) asterisk) shares held
--- ----------------- ------------------------------------------- -------------
10 Takaaki Wakasugi Mar. 1968 Graduated from Graduate School 3,000
(March 11, 1943) of Economics, the University of
Tokyo
Jun. 1985 Professor, Faculty of Economics,
the University of Tokyo
Sep. 1990 Co-director, Mitsui Life
Financial Research Center,
University of Michigan Ross
School of Business (to date)
Apr. 2003 * Director and General Manager,
Japan Corporate Governance
Research Institute, Inc. (to
date)
Apr. 2004 Professor, Faculty of Business
Administration, Tokyo Keizai
University (to date)
Jun. 2004 Professor Emeritus, the
University of Tokyo
Jun. 2005 Director of the Company (to date)
-------------------------------------------------------------------------------
11 Takuya Goto Apr. 1964 Joined Kao Soap Company (renamed 0
(August 19, 1940) Kao Corporation in 1985)
May 1987 General Manager, Tochigi Plant,
Kao Corporation
May 1990 General Manager, Chemical
Business Division, Kao
Corporation
Jun. 1990 Director of Kao Corporation
Jul. 1991 Managing Director of Kao
Corporation
Jun. 1996 Executive Managing Director of
Kao Corporation
Jun. 1997 President, Kao Corporation
Jun. 2004 Chairman, Kao Corporation (to
date)
-------------------------------------------------------------------------------
Notes:
1. There is no conflict of interests between the candidates and the Company.
2. Messrs. Takaaki Wakasugi and Takuya Goto are the candidates for outside
directors.
- 52 -
AGENDA 4: ELECTION OF ONE (1) CORPORATE AUDITOR
As the tenure of office of a corporate auditor Mr. Hisaaki Koga will expire at
the end of this General Meeting of Shareholders, the Company proposes the
appointment of one (1) corporate auditor at this meeting.
The Board of Corporate Auditors has given its consent to this nomination.
The candidate for the corporate auditor is as follows:
Brief personal profile
(the other company's name and position
thereof when the candidate is a Number of the
Name representative director of Company's
(Date of birth) othercompany; with an asterisk) shares held
--------------- ------------------------------------------------ -------------
Shigekazu Iijima Apr. 1972 Joined the Company 1,000
(July 7, 1948) Oct. 1990 General Manager, Accounting
Department, Finance and Accounting
Division
Apr. 1993 General Manager, Administration
Department, Electronic Device Division
Jun. 1996 Leader, Corporate Planning Group,
Corporate Planning Division
Jun. 1999 Director, Ricoh Elemex Corporation
Apr. 2004 General Manager, Business Planning
Department, International Business
Group
Jul. 2005 General Manager, Business Strategy &
Planning Center, International
Business Group (to date)
-------------------------------------------------------------------------------
Note: There is no conflict of interests between the candidate and the Company.
- 53 -
AGENDA 5: ELECTION OF ONE (1) SUBSTITUTE CORPORATE AUDITOR
The Corporation Law stipulates that a company may elect a substitute corporate
auditor. Hence, the Company proposes to appoint Mr. Satoshi Ito as a substitute
outside corporate auditor for outside corporate auditors Mr. Kenji Matsuishi
and Mr. Takehiko Wada so that audit operations can be carried out continuously
even in a case where the number of corporate auditors falls below the number
required by law.
The above appointment may be nullified only before the candidate assumes as
outside corporate auditors, by resolution of the Board of Directors and with
approval of the Board of Corporate Auditors.
The Board of Corporate Auditors has given its consent to this nomination.
The candidate for the substitute outside corporate auditor is as follows:
Brief personal profile
(the other company's name and position
thereof when the candidate is a Number of the
Name representative director of Company's
(Date of birth) othercompany; with an asterisk) shares held
--------------- ----------------------------------------------- -------------
Satoshi Itoh Jan. 1967 Joined Japan Office, Arthur Anderson 0
(July 25, 1942) Mar. 1967 Finished Master's Course, Graduate
School of Commerce, Chuo University
Dec. 1970 Registered as Certified Public
Accountant
Aug. 1975 Served at London Office, Arthur
Anderson
Sep. 1978 Partner, Arthur Anderson
Sep. 1993 Representative Partner of Asahi & Co.
Aug. 2001 Retired from Arthur Anderson and
Asahi & Co.
Apr. 2002 Professor, Graduate School of
International Accounting, Specialty
Graduate School (presently
Professional Graduate School), Chuo
University (to date)
-------------------------------------------------------------------------------
Note: There is no conflict of interests between the candidate and the Company.
- 54 -
AGENDA 6: GRANTING OF RETIREMENT ALLOWANCES TO RETIRING DIRECTORS AND A
CORPORATE AUDITOR
The Company proposes to pay retirement allowances in appropriate amounts with
the set limits, according to the standards prescribed by the Company, to
Messrs. Tatsuo Hirakawa, who retired as director on March 31, 2006, and Nobuo
Mii, who will retire as director at the end of this meeting, and Hisaaki Koga,
who will retire as corporate auditor at the end of this meeting, in order to
reward their services. The Company requests that the details such as the
amount, timing and manner of payment shall be left to the decision of the Board
of Directors regarding the directors and to the Board of Corporate Auditors
regarding the corporate auditor.
Brief personal profiles of the retired and retiring directors and a
corporate auditor are as follows:
Name Brief personal profile
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Tatsuo Hirakawa Jun. 1983 Director of the Company
Jun. 1990 Managing Director of the Company
Jun. 1994 Executive Managing Director of the Company
Oct. 2001 Deputy President and Representative Director of the
Company
Jun. 2005 Representative Director of the Company
Deputy President of the Company
Mar. 2006 Retired as Representative Director
Retired as Deputy President
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Nobuo Mii Jun. 2000 Director of the Company (to date)
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Hisaaki Koga Jun. 1998 Corporate Auditor of the Company (full-time) (to
date)
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