The guidelines for the Research and Development cost was reviewed to upgrade the accounting and budgeting accuracy. * The basic concepts are based upon the Guidelines for Environmental Accounting, 2002" published by the Ministry of the Environment. Environmental accounting in 2003 1. Accounting conditions Period covered: April 1, 2003 - March 31, 2004 Range of accounting: Japan Radio Co., Ltd. Mitaka Factory and Saitama Plant Basic concepts: Guidelines for Environmental Accounting, 2002 edition (Ministry of the Environment) Only costs of the measures taken for the purpose of environmental conservation should be included in the accounting, and as a result, those contributing to environmental conservation are excluded. Devaluation costs of environmental facilities are included. Only substantial effects (reduction effects, income from selling valuables) should be included, but estimated effects should not be counted. 2. Environmental conservation costs Unit: Million yen Classification FY 2002 FY 2003 Classification Efforts Investment Costs Investment Costs 1. Costs in business areas · Cost of waste disposal · Maintenance and management costs of facilities to reduce environmental loads 27.6 168.9 43.6 133.1 2. Up- and down-stream costs · Recycling cost 0 6.3 0 9.8 3. Management activity cost · Personnel cost of environmental control · Maintenance cost of environmental management systems 0 68.0 0 85.0 4. Research and development cost · Research and development cost for environmental conscious products 0 25.7 0 540.3 5. Costs of social activities · Environmental maintenance cost, including vegetation · The cost of publicity 0 16.5 0 11.4 6. Cost of environmental damage · Cost of restoring natural environments 0 0 0 0 Total 27.6 285.4 43.6 779.6 3. Effects Economic effects Unit: Million yen 2002 2003 Major actions taken Effect Material transportation effect Economic effect Material transportation effect Economic effect 1. Reduction of power (1,000 kwh) 605.9 8.8 3,920.8 39 Introduction of energy saving facility Review of manufacturing processes 2. Reduction of city gas (m3) --- --- 269,646 12.4 Review of manufacturing processes 3. Reduction of consumption of tap water and well water (m3) --- --- 40,536 0.6 Review of manufacturing processes 4. Resources recycling and reduction of wastes (L) 18,000 0.9 876 0.04 Review of manufacturing processes (1,000kg) 162 4 167 4.1 Recycling 5. Reduction of ozone-depleting substances (kg) 2,288 1.2 --- --- Review of manufacturing processes Total --- 14.9 --- 56.14 4. Report of results The conservation costs in 2003 increased by 173% from the preceding year due to increased development costs. These costs were increased due to additional development costs for products where the environment was taken into consideration. The effects were also increased by 277% because of a reduction in power consumption achieved through a review of production processes.