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 2004 1. Accounting conditions Period covered : April 1, 2004 - March 31, 2005 Range of accounting : Japan Radio Co., Ltd. Mitaka Plant 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 impacts (reduction impacts, income from selling valuables) should be included, but estimated impacts should not be counted. 2. Environmental conservation costs Unit: Million yen Classification FY 2004 Classification Efforts Investment Costs 1. Costs in business areas Cost of waste disposal Maintenance and management costs of facilities to reduce environmental impacts 40.6 133.8 2. Up- and down-stream costs Recycling cost 0 2.8 3. Management activity cost Personnel cost of environmental control Maintenance cost of environmental management systems 0 108.7 4. Research and development cost Research and development cost for environmental conscious product 0 1,100.1 5. Costs of social activities Environmental maintenance cost, including vegetation The cost of publicity 0 9.8 6. Cost of environmental damage Cost of restoring natural environments 0 0 Total 40.6 1,355.2 3. Impacts Economic impacts Unit: Million yen 2004 Impact Material transportation impact Economic impact 1. Reduction of power (1,000 kwh) 525.5 7.2 2. Reduction of city gas (m³) 41,953 2.4 3. Reduction of consumption of tap water and well water (m³) --- --- 4. Resources recycling and reduction of wastes (L) 2,852 4.4 (1,000kg) 355 7.1 5. Reduction of ozone-depleting substances (kg) --- --- 4. Report of results Expenses in the environmental costs for 2004 increased by 74 percent from the preceding year due to increased development of RoHS compliant products and impact reduction designing, etc. In terms of the investment amount, although investments to combat global warming including introduction of energy-saving fluorescent lamp stabilizers were made, compared to the preceding year, the figure for 2004 was only slightly more than for 2002 due to a deterioration in economic conditions.