Risk factors

While the risks that management recognizes as having a material impact on the Ricoh Groupʼs financial position, operating results, and cash flows are discussed on below pages, they are not all-inclusive. There are possibilities that the Ricoh Groupʼs business may be affected in the future by other risks that are currently unknown or not considered significant. Business and other risks are based on the Ricoh Groupʼs assessment as of March 31, 2025.

The Ricoh Group is transitioning its revenue structure and aiming to improve ROE over the mid-term by restructuring via business portfolio management and strategic investments in growth areas in light of changes in the business environment.

However, there is a risk that corporate value will be affected if structural reforms and cost optimization initiatives do not progress as planned, or if a decline in printing volumes accelerate and cannot be sufficiently offset by growth businesses, resulting in delays in profitability improvements and the achievement of mid-term targets.

Countermeasures to this risk have been incorporated into the Mid-Term Strategy ’26, and the following initiatives are being implemented.

To steadily advance the transition of the revenue structure, the Ricoh Group is promoting optimization of resource allocation through business portfolio management. With respect to investments in growth businesses, focus areas have been identified, and the Investment Committee has strengthened both investment decision-making and post-investment monitoring to enhance synergy creation and improve the certainty of monetization.

To improve profitability and optimize costs, the Ricoh Group is advancing cost structure transformation through back-office operation transformation and global SCM reforms, with the aim of strengthening overall profitability.

To improve the certainty of achieving annual performance targets, the Ricoh Group is strengthening its management control framework to enable the prompt implementation of necessary measures, in addition to conducting performance management and KPI management for each business.

By reflecting these initiatives in the annual rolling updates of the Mid-Term Strategy ’26, the Ricoh Group will make flexible strategic adjustments in response to changes in the business environment.

Achieving the transformation into a digital services company and sustaining medium- to long-term growth critically depend on human resources. Based on this recognition, under the Mid-Term Strategy ’26, we formulated personnel plans by theme and aim to systematically address gaps in functions and skills with anticipated shortages.

However, in the course of advancing personnel plans in greater detail, there is a risk that short-term increases in workload and adjustment burdens at operational sites may arise. Conversely, if responses are kept to a minimum, there is also a risk that shortages of personnel and skills necessary to achieve MidTerm Strategy ’26 will remain unresolved, causing personnel plans to become ineffective in practice.

In particular, if the planned development of future management talent, as well as the securing, development, and reskilling of highly skilled technical personnel supporting the competitiveness of digital services (including digital and AI), do not progress sufficiently, there is a risk that reform of the business portfolio and the creation of new value may stagnate, which could adversely affect the Ricoh Group’s business performance and medium- to long-term growth.

To achieve its business targets, the Ricoh Group is making the personnel plans based on the Mid-Term Strategy ’26 more sophisticated. We clarified issues relating to the quantity and quality of personnel required to execute business strategies, and established priority measures regarding talent acquisition, development, and allocation. In implementing these plans, the Ricoh Group is combining autonomous initiatives by each organization with company-wide measures and is aiming to reduce risks related to personnel planning through the expansion of recruitment channels and the promotion of personnel reallocation within the Group.

In parallel with these efforts, the Ricoh Group defined the qualities required of leaders capable of leading global organizations and is comprehensively proceeding with the selection training, assessment, and development of young leaders to build a medium- to long-term leadership pipeline aligned with those requirements. In addition, with respect to technical talent supporting digital services, we are expanding educational curricula and practical training programs aimed at acquiring digital and technical skills and are promoting the planned development and strengthening of technical personnel, including AI talent. Furthermore, the Ricoh Group, in fiscal 2025, continued training for managers renewed in fiscal 2024, and has provided training to managers of each Ricoh Group company in Japan^* to change their mindsets, which is necessary to create an environment that supports autonomy.

^* Ricoh Japan is not included as it provides similar training in-house.

The Ricoh Group is continuously investing in the introduction and use of advanced technologies, such as generative AI and digital twins, with the aim of strengthening long-term competitiveness and creating value. At the same time, the Ricoh Group is advancing the enhancement of its data infrastructure and the renewal of its IT infrastructure, both of which are essential for the effective use of these technologies.

While these initiatives may increase the investment burden in the short term, the Ricoh Group considers them to be important efforts toward achieving its objectives.

On the other hand, as the use of digital technologies, including generative AI, expands, there is a risk that, if governance related to data, AI, and IT does not function adequately, incidents such as information leakage to internal or external third parties, business execution or decision-making based on misinformation generated by AI, and use in violation of AI ethics standards may occur. If such events occur, they could adversely affect the Ricoh Group’s business performance and growth through operational disruptions or delays, deterioration in quality, additional costs associated with corrective measures, declines in trust from business partners, and damage to brand value.

Regarding the short-term investment burden, the Ricoh Group is working to minimize impact on business performance by steadily completing the phased rollout of its core system renewal while ensuring the realization of its benefits. At the same time, the Ricoh Group is strengthening its data infrastructure and governance to enhance productivity and contribute to business growth. In addition, the Ricoh Group is promoting AI transformation by combining generative AI with initiatives it has worked on to improve - 111 - productivity through the integrated advancement of processes, IT, and data. Through these efforts, the Ricoh Group increased in-house IT capabilities and improved productivity and aims to mitigate the adverse impact on business performance.

Furthermore, in response to risks such as information leakage, misinformation generated by AI, and use that deviates from AI ethics standards, the Ricoh Group is further strengthening governance related to data, AI and IT to support the expanded use of digital technologies. In particular, regarding generative AI, the Ricoh Group will continue to provide education to improve literacy, in addition to establishing governance structures and operational processes that enable employees to use technologies safely and securely. At the same time, the Ricoh Group is prioritizing the introduction of AI guardrails and conducting assessments in areas considered to involve high risk. By implementing these necessary measures at an early stage, we seek to prevent major incidents and minimize their impact.

The Ricoh Group positions the creation of new value together with customers, based on the Company’s proprietary technologies, as an important management issue. Based on this idea, the Ricoh Group is engaged in R&D for technologies that may become sources of future customer value and contribute to the enhancement of medium- to long-term competitiveness and corporate value, particularly in growth areas and new business domains.

In such R&D activities, there is a risk that the expected results of R&D investments may not be achieved due to changes in market and customer needs or shifts in technological trends. However, the Ricoh Group believes that strategically promoting R&D investment is essential for establishing future business foundations and securing competitive advantages.

On the other hand, if responses to technology ethics are inadequate or technologies and services are provided without sufficient consideration for their social impact, there is a risk that trust and credibility in the Company may be undermined and that undesirable effects on society may result.

With respect to R&D activities, the Ricoh Group is rolling out the MIOI-based R&D process^* across the Group, incorporating the verification of market and customer hypotheses from the initial stages of R&D. In addition to utilizing the knowledge gained through these activities, the Ricoh Group is actively incorporating external technologies through co-creation initiatives with academia and external companies, thereby enabling the review of themes and early shifts in direction and through this, the Ricoh Group aims to improve the likelihood of acquiring technologies that constitute its strengths and optimize R&D investments. By pursuing these initiatives, the Ricoh Group will appropriately manage uncertainty and continue R&D activities that contribute to future value creation.

Additionally, as for risks such as a decline in social trust resulting from insufficient responses to technology ethics and technology assessments, the Ricoh Group is implementing appropriate management from the R&D stage through the continuous provision of education and the establishment of a technology assessment framework. The Ricoh Group’s basic policy is to prevent such risks and minimize their impact on corporate value and social responsibility.

^* MIOI-based R&D process: Ricoh Group’s R&D process based on concepts of Market-In and Open Innovation

With the expansion of digital services and digitalization of business operations, the importance of information security continues to increase. In response to the increasing sophistication of cyberattacks and changes in regulations and customer requirements, the Ricoh Group is strengthening frameworks and operational measures to ensure information security. However, the following risks still exist.

• Security governance risk
  Security governance refers to management-led organizational efforts to appropriately manage and protect the information assets held and handled by the Ricoh Group and to continuously identify and mitigate information security risks.
  As digital services expand and digitalization of business operation advances, it is becoming increasingly important for the Group as a whole to strengthen decision-making related to security, clarify roles and responsibilities, establish policies and rules, and monitor operational status
  However, if the establishment or operation of security governance is insufficient, Group-wide alignment of policies and countermeasures may not be achieved, resulting in inconsistencies in responses across organizations and businesses. Therefore, there is a risk that the Ricoh Group’s overall business activities may be adversely affected
• Risk related to business continuity
  As sophisticated and advanced cyberattacks are increasing, the risk of unauthorized access, malware infections, ransomware attacks, and other cyber threats targeting the Ricoh Group’s business systems is rising. If such attacks result in system outages or malfunctions, data tampering, information leakage, or data destruction, they may have a broad impact on business activities, including sales, manufacturing, service provision, and internal operations
  In addition, depending on the scope and severity of an incident, investigations into the cause and restoration efforts may require considerable time, potentially resulting in the partial or complete suspension of business operations over an extended period. This could affect business continuity and financial performance through delays in customer service, impacts on business partners, and additional response costs.
• Risk related to reliability of products and services
  The Ricoh Group provides value to customers through digital services, and ensuring the safety and reliability of its products and services is an important factor in maintaining business continuity and customer trust.
  On the other hand, if security measures for products and services are insufficient, vulnerabilities in software or systems could lead to security incidents such as unauthorized access, information leakage, or service disruptions. Such incidents may not only affect customers’ operations and information assets but also undermine trust in the products and services of the Ricoh Group. Therefore, there is a risk that business activities and medium- to long-term competitiveness may be adversely affected.
• Risk related to trust from markets
  As cyberattacks continue to become more sophisticated and complex, insufficient security literacy among employees, contractors, and other related parties may result in security incidents caused by operational errors or inappropriate information management.
  Furthermore, if security policies and response measures aligned with evolving social and market trends are not fully communicated to stakeholders, there is a risk that trust from markets is declined or brand value gets damaged, regardless of whether security incidents actually occur.

As businesses are asked to implement national-level countermeasures in various countries and grasp an information security landscape that continues to change, implementing appropriate measures is one of the highest priority issues for the Ricoh Group.

• Countermeasures against security governance risk
  The Ricoh Group positions the strengthening of security governance as a priority issue, we are working to establish and operate unified security policies and management frameworks across the Group.
  Specifically, the Ricoh Group is clarifying security-related decision-making processes as well as roles and responsibilities and promoting security governance throughout our business units and affiliated companies through the development and enhancement of the structure of the Information Security Committee.
  In addition, by continuously maintaining regulations and rules and monitoring and verifying compliance, the Ricoh Group maintains and improves group-wide security standards.
• Countermeasures against risk related to business continuity
  To prepare for increasingly sophisticated and advanced cyberattacks, the Ricoh Group is strengthening security measures and monitoring systems for its business systems. Specifically, the Ricoh Group continuously collects and analyzes external threat information and maintains constant monitoring of its IT systems to establish a framework capable of detecting signs of unauthorized access, malware infections, and other threats at an early stage.
  Furthermore, to minimize the impact of incidents when they occur, the Ricoh Group is progressively developing and conducting training for business continuity plans (BCPs) and IT system recovery plans covering important businesses and operational processes. Through these initiatives, the Ricoh Group aims to enable rapid response and early recovery to reduce the impact on business activities.
• Countermeasures against risk related to reliability of products and services
  The Ricoh Group has adopted a “secure by design” approach that incorporates security considerations from the planning and design stages of products and services and is strengthening quality management related to product security.
  In addition, the Ricoh Group continuously checks for vulnerabilities in products already on the market and services currently being provided and has established systems to promptly implement corrective measures. Furthermore, the Ricoh Group is establishing dedicated contact points for identifying and addressing security issues related to products and services and is developing guidelines for vulnerability response. The Ricoh Group is also striving to maintain and improve safety and reliability by responding to changes in laws, regulations, and customer requirements in each country.
• Countermeasures against risk related to trust from markets
  The Ricoh Group continuously conducts education and training programs aimed at improving the security literacy of all related parties, including employees and contractors. Through these efforts, the Ricoh Group aims to prevent security incidents caused by human factors.
  Ricoh Group aims to prevent security incidents caused by human factors. In addition, the Ricoh Group organizes its security activity policies based on changes in threat trends, regulations, and customer requirements and regularly reviews and visualizes the status of these initiatives. Moreover, by disclosing information externally as necessary, the Ricoh Group is improving transparency regarding its security measures and working to maintain trust from markets and stakeholders

With increasingly intensified changes in the internal and external environment, the Ricoh Group recognizes that strengthening group governance is extremely important to maintain healthy growth. Based on this recognition, the Ricoh Group is advancing organizational restructuring and the delegation of authority in accordance with the Mid-Term Strategy ’26. While these initiatives may give rise to risks such as insufficient governance, inconsistencies in policies, or delays in strategy execution, they are intended to accelerate decision-making and promote autonomous business operations, and the Ricoh Group has been implementing corresponding countermeasures.

Since the approach to strengthen the Ricoh Group governance has a significant impact on the soundness of business operations, there is a risk that excessive oversight and control by headquarters could hinder appropriate business management, while insufficient oversight could lead to misconduct or scandals that damage brand image and credibility.

For organizations subject to restructuring or delegation of authority, the Ricoh Group is working to maintain an appropriate balance between organizational autonomy and governance through measures such as authority management, monitoring of important matters by headquarters, and clarification of governance processes. Additionally, the Ricoh Group strengthens considerations of governance to minimize group governance risks when reviewing organizational structure, to ensure a flexible and prompt response to risks. Moreover, to enable each Ricoh group company to develop and operate its governance system autonomously under the company-wide policy, the headquarters and the Supervising Organizations cooperate to provide appropriate guidance and management supervision according to each company’s unique characteristics and capability of risk management.

The Ricoh Group positions responding to ESG/SDGs as an important management issue that affects Ricoh’s business activities and medium- to long-term growth. The Ricoh Group promotes its business activities with human rights, decarbonization, and resource, circulation and biodiversity conservation as particularly important risks.

If the Ricoh Group’s response in these areas lags behind that of competitors, there will be a risk that it may not only have a negative impact on business such as the loss of business opportunities but also cause significant damage to the Company such as loss of social credibility and damage to brand value.

The Ricoh Group is strengthening the following initiatives as measures to address risks related to ESG/SDGs.

First, as for human rights, the Ricoh Group has established a human rights due diligence process and conducts annual human rights risk assessments targeting major Ricoh Group companies in order to identify issues and areas for improvement. Based on the results of these assessments, the Ricoh Group is working to mitigate human rights risks through continuous improvement activities. In addition, as part of its environmental conservation initiatives, the Ricoh Group has formulated a decarbonization roadmap and renewable energy introduction plan based on net-zero targets approved by SBTi^* and is promoting initiatives toward decarbonization. Furthermore, the Ricoh Group continuously monitors trends in various environmental regulations and standards related to products and considers appropriate responses. In facility management, the Ricoh Group is also working to reduce environmental risks by developing research and response plans regarding soil and groundwater contamination.

^*SBTi (Science Based Targets initiative): An international initiative that certifies that a company’s GHG (greenhouse gas) reduction targets are consistent with scientific evidence

To prepare for the event of the occurrence of unpredictable circumstances such as large-scale earthquakes, tsunamis, floods, suspension of supply, and geopolitical risk, the Ricoh Group has implemented various measures to minimize the impact on business and ensure a swift recovery.

On the other hand, depending on the nature and scale of the unpredictable circumstances, there is a risk of losing business opportunities due to the occurrence of delay or suspension in the supply of parts, delay or suspension of manufacturing by factories, delay or suspension of transportation, or delay or suspension of goods to sales companies.

The Ricoh Group strengthened the following prevention and response processes assuming risk occurrences:

• Securing inventory for contingencies
• Selecting multiple suppliers or alternative parts for critical parts
• Setting and operating alert levels for each area such as purchasing and production
• Conducting BCP drills that assume new work styles such as remote work

In addition, the Ricoh Group regularly conducts not only desk training but also practical training. The Ricoh Group will continue to verify and improve the effectiveness of these measures.

The Ricoh Group has implemented various measures to minimize the impact on business and ensure a swift recovery in case of the occurrence of large-scale natural disasters, incidents, and accidents which may occur in Japan and overseas, resulting in human and property damage.

On the other hand, depending on nature and the scale of natural disasters, incidents, and accidents, there is a risk that they could severely impact business.

In response to these risks, the Ricoh Group is implementing the following measures: Japan

• The Ricoh Group has built and is continuously reviewing a system to ensure appropriate responses during disasters.
• To prevent and minimize damage from disasters, the Ricoh Group regularly conducts joint disaster response drills within Japan and disaster prevention drills at each business site (including night-time evacuation drills). The Ricoh Group is working to create a disaster-resistant workplace by ensuring that buildings are earthquake-proof and inspecting and maintaining equipment used in emergencies.
• In response to a “Nankai Trough Earthquake” and the issuance of “Nankai Trough Earthquake Extra Information,” the Ricoh Group is promoting specific initiatives based on established guidelines that allow employees and the disaster response headquarters can take appropriate action, including life-protecting measures in emergency situations.
• In response to flood risks, the Ricoh Group has prepared a recovery action plan in response to severe flooding and conducted both desk and on-site training based on the plan. In addition, the Ricoh Group is implementing flood risk measures at all Ricoh Group sites, including necessary construction work at sites with relatively high risk and operation of a visualization tool for flood risk information, to improve employees’ response capabilities.
• In response to volcanic eruption risks, the Ricoh Group identifies and visualize risks and advances countermeasures at sites with risks based on the Ricoh Group Guidelines for Volcanic Eruptions in Japan (including Mt. Fuji) and is improving employees’ response capabilities.

Outside Japan

• The Ricoh Group has established crisis response standards for overseas affiliated companies, defining the basic response policies in the event of natural disasters, incidents, and accidents, while clarifying the roles and responsibilities of each organization.
• The Ricoh Group is enhancing the crisis response capabilities of our overseas affiliates by identifying major natural disaster risks at overseas affiliates, directing necessary responses when discrepancies with third-party information are found, verifying reporting routes during crises, and supporting companies with challenges in BCP development and operation.

The Ricoh Group is working on strengthening its compliance framework through measures such as thoroughly communicating the Code of Conduct, conducting education and training programs, and establishing consultation services to prevent compliance issues and to ensure appropriate responses if such issues occur.

On the other hand, if compliance issues such as violation of laws and regulations, harassment, or behavior that violates internal rules or the Ricoh Group Code of Conduct occur and are not handled appropriately, there is a risk that such matters may escalate into a social problem.

Japan / Outside Japan

Japan

There is a risk of adverse impact on performance due to a greater-than-expected decline in print volumes in the trend toward paperless operations in the market for MFPs and printers for office use and increases in costs for part procurements.

In the Office Printing business, in addition to maintaining and expanding the existing customer base, the Ricoh Group is implementing various measures for profitability improvement such as comprehensive review of operation structure from sales to production, specification changes to curb rising part procurement costs, thorough improvement of SCM efficiency and promotion of operational excellence.

Furthermore, regarding the supply system for edge devices, including MFPs, the Ricoh Group is collaborating with other companies to establish optimal production and development systems, thereby offering competitive products and improving profitability.

Additionally, from a business portfolio perspective, the Ricoh Group has steadily achieved growth in the Workplace Services domain, particularly in process automation and workplace experience, and is reducing risks in the Office Printing domain through the expansion of recurring revenues.

^* Edge devices: MFPs, cameras, and other network hardware that can process text, image, audio, video, and other data

There is a risk that the securing and strengthening of resources necessary to provide value by combining the Ricoh Group’s own products and services with those of other companies, which are essential for growth as an integrator, may not progress sufficiently or may be delayed.

To expand the resources necessary for growth as an integrator, the Ricoh Group is working not only to raise the skill levels of employees across the Group based on its human capital strategy, but also to develop personnel who promote co-creation with customers and to encourage the utilization of global talent. The Group is also enhancing its capabilities to deliver value in addressing challenges facing customers by establishing frameworks for sharing expertise across regions and by promoting cross-business talent development and personnel rotation.

In addition, the Ricoh Group is strengthening and expanding its technological capabilities and proprietary intellectual property to build a foundation for differentiation as an integrator. Where necessary, the Ricoh Group is utilizing M&A and partnerships with external companies to acquire technologies, talent, and intellectual property, thereby securing and strengthening its capabilities.

Through these initiatives, the Ricoh Group aims to steadily enhance the value it provides to customers and its competitiveness, and reduce risks related to business growth and revenue expansion as an integrator.

There is a risk of downturn in the performance of the Commercial Printing business due to weak demand in the North American market triggered by changes in tariff policies, rising part procurement costs, a decrease in demand for large-scale printing within companies, and the consolidation and integration of print output volumes by the expansion of paperless operations.

To reduce the risk of downturn in the performance in the Commercial Printing business, the Ricoh Group is strengthening relationships with distributors in Europe and North America, advancing the development of untapped distributors in emerging countries, and promoting appropriate pricing measures to offset the impact of rising part procurement costs. Additionally, through business portfolio management, the Ricoh Group is transforming its business structure by strengthening resource allocation to high-value-added areas, which are expected to continue growing, as well as inkjet technology and products.

Although the thermal market is growing steadily due to the increase in demand for consumer goods driven by global population growth, commoditization is progressing. The Ricoh Group operates globally, but there is a risk of adverse impact on the Ricoh Group’s business performance through deteriorated profitability, excess inventory, and lower equipment utilization rates, and rapid changes in the global situation and other factors may slow growth.

To reduce the risk of fluctuations in business performance, the Ricoh Group is strengthening its market trend monitoring system, refining demand forecasts, and enhancing daily management systems. In response to demand fluctuations from regional economic trends, the Ricoh Group leverages its global sales network and production infrastructure to optimize production and supply operations in appropriate regions, aiming to stabilize profitability.

Additionally, by expanding the smart packaging business that prints directly on packaging materials, the Ricoh Group aims to contribute to solving social issues, and stabilize revenue.

The Ricoh Group has recorded goodwill arising from corporate acquisitions, as well as various property, plant and equipment and intangible assets for business use. There is a risk of adverse effects on the Ricoh Group’s operating results and financial condition if these assets fail to generate the expected cash flow due to discrepancies with future performance plans or market changes

When acquiring assets, the Ricoh Group follows prescribed procedures based on the investment amount and content, considering various factors such as investment effectiveness to determine the feasibility of execution. Additionally, for external investment projects, the Investment Committee, an advisory body to the GMC, deliberates on the appropriateness of investments from financial, strategic, and risk perspectives, and submits its views to the GMC. For approved investment projects, the committee has established a system to regularly monitor progress, thus implementing measures against risks.

The Ricoh Group applies tax effect accounting. Deferred tax assets are recognized against future timing differences and loss carryforwards. The recoverability of deferred tax assets is assessed based on future taxable income anticipated from business plans. There is a risk of adverse effects on the operating results and financial condition, that if the estimate of future taxable income declines compared to current estimates, the recoverable amount of deferred tax assets decreases, leading to a reduction in deferred tax assets.

In evaluating deferred tax assets, the Ricoh Group considers the planned realization period of deferred tax liabilities, estimated future taxable income, and tax strategies. Regarding the estimation of future taxable income, each business unit monitors performance progress based on business plans and establishes a system that can autonomously and quickly respond to any factors that may hinder the achievement of these plans.

The Ricoh Group considers intellectual property rights as important management assets and acquires patents, design rights, trademarks, and other intellectual property rights to protect, differentiate, and expand its current and future business and supporting technologies. However, risk exists that competitors may develop equivalent technologies, reducing our uniqueness, or that the Ricoh Group may not obtain the desired rights after examination by various countries’ patent offices, leading to insufficient protection. Additionally, there risks arise that third parties may allege infringements on their intellectual property rights, make demands for sales injunctions or damages, or even initiate litigation. Furthermore, as new businesses are launched and collaborations, joint research, and joint development with other companies become more active, the number of contracts related to intellectual property rights increases, heightening the risk of adverse impacts on our business should any issues arise from these contracts.

The Ricoh Group conducts thorough prior-art searches before patent applications and aims to improve the accuracy of intellectual property rights acquisition by understanding the laws, examination standards, and processes related to intellectual property in various countries. In addition, before offering our products and services to the market, the Ricoh Group thoroughly investigates third-party intellectual property rights and for possible conflict with our products and services. If there is a risk of infringing on third-party intellectual property rights, the Ricoh Group seeks assessments from external lawyers or patent attorneys and, if necessary, makes design changes, negotiates licenses, or obtains licenses to reduce the risk of disputes with third parties.

The Ricoh Group emphasizes “protection of intellectual property rights” as an objective affecting our performance. To prevent disputes and reduce risks, the Ricoh Group has converted past cases of contractual disputes related to intellectual property rights into a developed knowledge base.

The products manufactured and sold by the Ricoh Group may face the following risks that can lead to a loss of customers’ trust and social credibility, damage to the corporate and product brands, and potentially make business continuity difficult.

The Ricoh Group is strengthening prevention and response processes for “product quality/product liability.”

During business activities, there is a risk of significant damage to the Company due to factors such as:

During business activities, there is a risk of significant damage to the Company, if violations of antitrust and competition laws occur. Potential consequences include administrative sanctions such as surcharge payment orders, criminal penalties, suspension of transactions with government agencies, and adverse impacts on business due to loss of social credibility.

To ensure thorough compliance with antitrust and competition laws in various countries, legal departments and other relevant functions in each region take the lead in strengthening adherence to these laws, conducting educational activities, and enhancing response measures in case of violations.

During business activities, there is a risk of significant damage to the Company if violation of environmentrelated laws occurs. Potential consequences include impacts on production due to administrative sanctions, burden of surcharges, criminal penalties, and adverse effects on business due to loss of social credibility and damage to brand value.

The Ricoh Group has established an Environmental Management System to ensure comprehensive compliance with environment-related laws through regular assessments and timely recognition and response to regulatory changes. The Ricoh Group also implements environmental due diligence during M&A activities to prevent risks.

Additionally, the Ricoh Group actively discloses collected environmental performance data and ensure transparency and reliability by subjecting key data to third-party verification.

A considerable portion of our production and sales activities is conducted outside of Japan, in regions such as the U.S., and Europe. The Ricoh Group's business activities are affected by exchange rate fluctuations in the following ways:

• Exchange rate fluctuations impact the consolidated statement of profit or loss and consolidated statement of comprehensive income because performance of overseas subsidiaries denominated in local currencies is converted to yen using the average rate for the applicable fiscal year.
• Exchange rate fluctuations impact the amounts of assets and liabilities on the consolidated statement of financial position because assets and liabilities denominated in local currencies are converted to yen using the exchange rate as of the closing date of the applicable fiscal year.

• To minimize the impact of short-term exchange rate fluctuations in major currencies such as the U. S. dollar, euro, and yen, the Ricoh Group conducts hedge transactions, such as foreign currency contracts, with financial institutions. The companies or organizations authorized to conduct hedge transactions are limited and strictly governed by financial rules.
• The Ricoh Group minimizes foreign exchange risk by maximizing netting in settlements across the entire Group.
• The Ricoh Group performs currency matching for the assets and liabilities of overseas subsidiaries.

For plan assets held in defined benefit and retirement benefit plans, the Ricoh Group records these benefit costs based on applicable accounting policies and contributes funds in compliance with government regulations.

Although a large amount of funds is not immediately required at this time, there is a risk that if the profitability of plan assets declines due to unexpected and unforeseen movements in the equity and debt markets, additional fund contributions and cost burdens may become necessary.

At the Pension Committee, the Ricoh Group conducts periodic actuarial revaluations and regularly reviews and implements revised plans as appropriate, in view of government regulations, personnel strategy and personnel systems.

For definitions of urgency, impact and risk management level, see Process of determining managerial risks in Risk Management Process.