Notice of Resolution at The 117th Ordinary General Meeting of Shareholders

Q&A

*This is a summary of the some of the main questions and answers picked up from a number of questions relating to the Business Report and Agendas.

■ Questions and answers relating to the Business Report

Question 1:

I would like you to improve your shareholder incentives. Also, I find it strange that you are offering a commemorative dividend while reducing dividends. Ricoh's stock valuation seems below those of other companies in the same sector.

Respondent:

Yoshinori Yamashita

Answer:

We greatly appreciate the views of shareholders on these incentives. We reduced dividends in light of a downward revision in our business performance. We will invest in structural reform and in the future of Ricoh so we can meet the expectations of shareholders and reward them with solid results.

Question 2:

How exactly are you delegating authority to reinforce your management system? Also, after visiting the Gotemba plant we sent an improvement proposal to the site head but did not receive a satisfactory response. Shouldn't you carefully listen to the opinions of others?

Respondent:

Yoshinori Yamashita

Answer:

We have clarified business categories and delegated more authority to division managers.
We set up global headquarters for commercial and industrial printing in Europe and for office services in the United States, appointing local personnel to oversee these operations. We will endeavor to ensure that our operations quickly reflect customer trends in advanced markets.
I apologize for the inadequate response from the Gotemba site. We transformed it from a mass production plant into the Ricoh Eco Business Development Center in 2015. It currently functions as an MFP recycling center and as a site for developing tomorrow's environmental technologies. We look for the center to cooperate with organizations in the local region.
On the matter of listening to the views of others, Ricoh management is endeavoring to challenge conventional wisdom. We will endeavor to shift away from an internal focus, carefully heed our customers' opinions, and cultivate our businesses to match the speed of changes in the operating climate.

Question 3:

What steps for the cloud and the Internet of Things will Ricoh take as part of its growth strategies?

Respondent:

Yoshinori Yamashita

Answer:

We already offer services that connect multifunctional devices to the cloud. With the 360-degree RICOH THETA camera, for example, we have started a cloud service for real estate brokerages and other customers. We will enhance our applications and foster workflow improvements for specific customer businesses.
I think that Ricoh has led the way in the Internet of Things. Our @Remote maintenance support system assesses the operational state of customer MFPs from our centers. We have offered services for many years that ensure that equipment functions reliably.
We aim to strengthen our position using our Interactive Whiteboards, and Unified Communications System for videoconferences and contribute to customer knowledge creation by cultivating businesses for the cloud and the Internet of Things.

Respondent:

Yohzoh Matsuura

Answer:

Let me add some comments as head of research and development. Ricoh has been at the forefront of progress in such areas as the Internet of Things and artificial intelligence.
Although we faced a lot of challenges in developing software for @Remote, cloud progress in recent years has enhanced our development efficiency.
As for the Internet of Things, Ricoh has many advanced optical and image processing technologies, particularly in the field of sensing.
Open platforms are already in place for artificial intelligence, and Ricoh is well placed to apply them. With our Interactive Whiteboards, for example, we are collaborating with IBM 's Watson platform to automate the creation of minutes for meetings.
We set up an internal artificial intelligence development unit, and collaborate extensively with academic institutions in development projects.
On the Big Data front, as Mr. Yamashita mentioned, we have done much to assess the operations of customer equipment, and we consider this a major strength.

Question 4:

You say that you will provide value to customers. What sort of value will you deliver?

Respondent:

Yoshinori Yamashita

Answer:

Improving workflows is a vital example of the value we offer in the office business. We will do more to highlight the diverse services that we offer worldwide.

Respondent:

Kunihiko Satoh

Answer:

In our core MFP business, we will deliver a range of value, including printing and scanning features, various apps, and cloud-based solutions to improve businesses for small and medium-sized enterprises.
We already help enhance the productivity of meetings with our Interactive Whiteboards, by sharing images remotely through teleconferencing.
As well as offering products, we recognize that is also important for sales regions to identify local customer needs and feedback that information to our manufacturing operations.

Question 5:

You earlier announced that one strength that Ricoh would leverage is that it plans to derive all of its electricity from renewable energy by 2050. How will you deliver on that objective?

Respondent:

Yoshinori Yamashita

Answer:

Ricoh has remained a leader in sustainable environmental management since announcing its commitment in that regard in 1998.
Ricoh set and declared objectives both as a consumer and as a prospective supplier of electricity.
In one initiative, the Ricoh Eco Business Development Center is collaborating locally with the Gotemba municipal government to create and harness thermal energy from biomass boilers fueled with wood from thinned forests, and is also progressing with micro-hydro power generation with small water wheels installed in pipes in our building.
It is through such efforts that we can cover around 60% of the center's electricity and thermal energy needs in-house. We will accelerate these and other efforts within Ricoh.

Question 6:

In recent years, competition has intensified in a maturing MFP market. Hasn't Ricoh lagged other companies in this respect. Shouldn't you set about acquiring companies that have advanced technologies?

Respondent:

Yoshinori Yamashita

Answer:

It is true, as you say, that competition has intensified, but I do not think that the competitiveness of our products is declining. As you noted, acquisitions are worth considering, and we will look into them as needed.

Question 7:

Ricoh is mentioned in a written statement in a court case. What is your stance on this matter?

Respondent:

Yoshinori Yamashita

Answer:

This matter does not relate to the agenda of this general meeting. We will respond as necessary after confirming the facts. as necessary.

Question 8:

What are your financial targets for the final year of your 19th Mid-Term Management Plan? Also, won't the former President and Chairman, who were Representative Directors, hamper the endeavors of the new top management team by serving as Corporate Executive Advisor and Chairman, respectively?

Respondent:

Yoshinori Yamashita

Answer:

While I cannot present a dividend target for the final year of the plan at this juncture, I can say that we target \100 billion in operating profit that year, and will endeavor to generate cash will which deliver dividends to shareholders.
Corporate executive advisor Zenji Miura is very active outside the Company. We seek guidance from Chairman Shiro Kondo, drawing on his manufacturing and business development expertise. As President, I am responsible for the management of the Company.

Question 9:

Some press reports stated that Ricoh's focus on its copier business caused its performance to deteriorate. What is your view?

Respondent:

Yoshinori Yamashita

Answer:

We believe that MFPs will remain important information tools. With a surge in the volume of electronic documents, customers now work in hybrid paper and digital environments. We wish to improve customer workflows under such circumstances, and look to develop a range of businesses beyond MFPs.

Question 10:

Is there any truth to a media report that you might sell Ricoh Logistics?

Respondent:

Yoshinori Yamashita

Answer:

Ricoh did not make any such announcement, and that day we posted a statement regarding that coverage on our website. The report caused great concern for the customers, employees, and other stakeholders of Ricoh Logistics.
That company not only handles product transportation logistics but also plays a vital role in logistics within domestic production sites.

Question 11:

The convocation notice mentioned misconduct by some overseas affiliate employees. Although you explained that you had strengthened management oversight over affiliates and improved the effectiveness of internal audits, how specifically did you bolster controls, including those for affiliates?

Respondent:

Yoshinori Yamashita

Answer:

A second-quarter audit of Ricoh India in 2015 raised concerns about accounting irregularities, leading to the replacement of the local management team. I cannot provide a detailed explanation here today, as the matter is ongoing. I can say, however, that we thereafter properly disclosed results for the year ended March 31, 2016, to the Bombay Stock Exchange, and the situation has returned to normal.
Head office and our regional headquarters are working together to strengthen the structure. Ricoh India is our only listed overseas affiliate. The accounting incident with that company was despite having a governance system and audit committee. Now, we have specialists providing full-time monitoring and are able to conduct more extensive audits. We are implementing this approach in India and elsewhere.

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