Index and calculation method of environmental cost and economic effect

With reference to the guidelines of the Ministry of the Environment, FHI formulated its own guidelines*1 according to its environmental conservation activity organization, based on which the environmental cost and economic effects are calculated. (The same method is applied to FHI group companies.) Please refer to pages 9 to 13 in the Supplementary Volume for Data related to 2006 Environmental & Social Report for details on calculation method.

Method used for calculating the environmental cost and the amount of money invested in facilities

The amount of money invested (Amount invested ≥25 million yen) in facilities that have been introduced for both environmental and other purposes, plus related costs (maintenance management cost etc.), and finally labor cost are calculated on differential or pro-rata basis. For example, investment amount and environmental cost for energy saving at one manufacturing facility is calculated as follows:

Regarding small facilities whose investment amount is less than 25 million yen, and anything purchased primarily for environmental purposes, any costs related to these environmental facilities, such as investment amount and maintenance cost, are all included in the calculation. Please note that depreciation cost of facilities invested is not included in the environmental cost from the view point of placing value on cash flow. Small expenses such as fixes asset tax and insurance cost are also extracted from the total. Environmental cost and economic effect by environmental facilities are only recorded for 3 years starting from the 2nd year after the facilities are put into operation.