News Release ghvz090513b

5. NON-CONSOLIDATED FINANCIAL STATEMENTS

(6)	Significant Matters Pertaining to the Preparation of Non-Consolidated Financial Statements

<1> Valuation of certain assets

a)	Securities
	Investments in subsidiaries and affiliated companies
		Investments in subsidiaries and affiliated companies are stated at cost, which are determined by the moving average method.
	Other securities
	-	Marketable securities The securities whose fair value are readily determinable are stated at fair value as of balance sheet date with unrealized gains and losses directly reported as a separate component of net assets. The cost of securities sold is determined by the moving average method.
	-	Non-marketable securities The securities whose fair value are not readily determinable are stated at cost, which are determined by the moving average method.
b)	Inventories
	Supplies are stated at cost, which are determined by the last purchase cost method (The balance sheet amount is computed using the method of devaluing the book price to reflect declines in profitability). (Change in Accounting Policy) From the current fiscal year, the Company applies the Accounting Standards Board of Japan Statements No.9 "Accounting Standard for Measurement of Inventories" July 5, 2006. Application of this change has no effect on the statements of income for the current fiscal year.

<2> Depreciation and amortization of fixed assets

a)	Property, plant, and equipment (except lease assets) and intangible assets (except lease assets)
	Property, plant, and equipment (except lease assets) are depreciated by using the declining-balance method with the exception of buildings for which the straight-line method is used. Intangible assets (except lease assets) are amortized on a straight-line basis. The useful lives are calculated on the estimated cycle of the assets and the residual values are calculated based on real residual values. Internal-use software is amortized on a straight-line basis over their estimated useful lives within five years.
b)	Leases assets
	Financial leases other than those deemed to transfer ownership of properties to lessees Depreciation of property, plant and equipment is computed by the declining-balance method with the exception of buildings, which are depreciated on a straight-line basis. The useful lives of the assets are the term of leases and the residual values of the assets are determined substantially. In a case where the residual value of a leased asset other than a building equals zero, depreciation of such asset is computed by multiplying ten-ninths to the equivalent amount computed by the declining-balance method under an assumption that the residual value of the asset is 10% of its acquisition cost. Intangible assets are amortized over the term of leases on a straight-line basis.

<3> Allowances

a)	Allowance for doubtful accounts
	To cover expected losses from bad debts, estimated amounts to be uncollectible are accrued, for general claims, computing on historical bad-debt ratios, and for specific claims including doubtful accounts, considering their own recoverability. No allowance is accrued as of this year-end.
b)	Liability for employees' retirement benefits
	To provide for employees' pension benefits, benefit obligations and plan assets are estimated and accrued as of this year-end. Prior service cost is amortized on a straight-line basis over the average remaining service periods at the time of recognition. Actuarial net gain or loss is amortized on a straight-line basis over the average remaining services periods at the time of recognition.

<4> Hedging Activities

a)	Accounting for Hedging Activities
	Hedging activities are principally accounted for under "deferral hedge accounting." Designation ("Furiate-shori") is applied to forward exchange contracts and other foreign exchange contracts, and designated "exceptional accounting" ("Tokurei-shori") to interest-rate swaps that qualify for "exceptional accounting" (Accounting Standards for Financial Instruments, Footnote 14).
b)	Hedging Instruments and Hedged Items
	Hedging Instruments
		Hedging instruments include forward exchange contracts, currency swaps, coupon swaps (i.e. currency swap of interest portion only), interest-rate swaps, interest-rate options, and combinations of the above.
	Hedged Items
		Hedged items are assets (securities, loans, receivables, etc.) and liabilities (corporate bonds, borrowings, payables, etc.) exposed to variability of fair value or future cash flows derived from fluctuations of the exchange rate, interest rate, etc.
c)	Hedging Policy
	To hedge the foreign exchange risks regarding assets and liabilities exposed to foreign exchange risks, forward exchange contracts, currency swaps and other instruments are employed in compliance with internal rules. To hedge the interest-rate risks regarding assets and liabilities exposed to interest-rate risks, interest-rate swaps and other instruments are employed in compliance with internal rules.
d)	Assessment of Hedge Effectiveness
	At the end of each quarter, hedge effectiveness is assessed on each hedging transaction. This quarterly assessment excludes any transaction where important terms and conditions such as principal, interest-rate and duration are identical between hedging instruments and hedged items.

<5> Consumption Taxes

Consumption tax is separately accounted for by excluding it from each transaction amount.