We strive daily to be a company
that society can continue to rely on.

INTEGRATED REPORT 2022

INTEGRATED REPORT 2022

Business Portfolio Management

Source of Our Strengths: Business Portfolio Management
HOYA’s portfolio management aims to secure profitability, stability, and growth potential of the Group as awhole by operating multiple businesses with different characteristics in terms of business model, sensitivity
to economic cycles, etc., to diversify risk.
We examine each business to determine its stage in the lifecycle and allocate more man agement resources
to areas with higher growth potential. We construct our business portfolio based on the survival of thefittest principle by, for example, withdrawing from a business that has lost its competitive edge.
The present two business areas for portfolio management are Life Care and Information Technology.

The HOYA Management System
Based on the idea that “the accumulation of short-term results will produce long-term growth,” we conduct
rapid-cycle reviews and improvement activities on a quarterly basis.
After receiving explanations on growth strategy and operating results from each business division,
executive officers make decisions on the allocation of management resources to each business as well as
any business downscaling or withdrawal decisions, which is the foundation of our business portfolio
management.

HOYA INTEGRATED REPORT 2022

1

Copyright ©2021 HOYA GROUP

The HOYA Management System
The HOYA Management System

INTEGRATED REPORT 2022

Based on the idea that “the accumulation of short-term results will produce long-term growth,” we conduct
Based on theidea that
accumulationof short-term
resultsbasis.
will produce long-term growth,” we conduct
rapid-cycle
reviews
and“theimprovement
activities
on a quarterly
rapid-cycle reviews and improvement activities on a quarterly basis.
After receiving explanations on growth strategy and operating results from each business division,
After
receiving
explanations
on growthandofoperating
results
from eachbusiness
division,
executive
officers
make decisions
on thestrategy
allocation
management
resources
to eachbusiness
as well as
executive
officers
makedecisionsontheallocationofmanagement
resourcestoeachbusiness
as well as
any business downscaling or withdrawal decisions, which is the foundation of our business portfolio
any business downscaling or withdrawal decisions, which is the foundation of our business portfolio
management.
management.

Areas of Focus over the Next 10 Years
Areas of Focus over the Next 10 Years
Refinement of Business Portfolio Strategy
Refinement of Business Portfolio Strategy
Going forward, the Life Care business is expected to continue undergoing stable growth in the long term, on
Going
forward,the Life
Care businessis expected
toincreasing
continue undergoinggrowthin thelongterm, onthebackof the aging
populationworldwide
and thedemand forstablea higherqualityof life(QOL)
the backpeopleof thestemming
aging populationworldwide
and theincreasing
demand The
for aInformation
higher qualityof life (QOL)
amongfrom economic
growthin emerging
countries.
Technology
amongpeoplestemming
from
economic
growthinemerging
countries.
The
Information
Technology
business, which has been regarded as a cash cow not only beca use HOYA has already acquired a highbusiness,
which
been
regardedaswas
a cashcow not
only beca use
HOYA
has potential
already acquireda highmarket sharebuthasalsobecausethere
a periodof stagnationin thegrowthof related
markets,
marketshare buttoalso
becausewas a periodstagnation ininthe
growth potentialof related markets,isalso expected
grow
due to there
such factors
as theofbreakthroughsemiconductor
miniaturizationis also expected
to growdue
to thesuch
factors as thebreakthroughsemiconductor
miniaturization
technology
in recentyears
andaccelerationof thedata-drivenin
trend
in all industries.
Given suchtechnology in recent
years
and
the acceleration
data-driven
trend inpotential
all industries.
Given suchcircumstances,
we willput inplace
a framework ofto thedetermine the growth
on a business-bycircumstances,
we willput
in place a framework
to determine theon a business-bybusiness basis andon aproduct-by-productbasis,
irrespectiveof growth
whetherpotential
the segment
is in the Life Carebusiness
basis
and
on
a
product-by-productbasis,
irrespectiveofwhetherthesegment
is in the Life Carebusiness or the Information Technology business.
business or the Information Technology business.
We also recognize that the development/acquisition of new businesses that serve as the driving force for
We also recognize
thatthe development/acquisitionof new businesses
thatsoserve
as thedriving
force
foringperpetual
corporate
growthis the most significant management
challenge,
we willwork
on thisby takperpetual
corporate
growthis in-housethe mostdevelopment
significant management
challenge,
so wewillnotwork
on thisbycasestak inga two-pronged
approach,i.e.,and M&A. Given
that there
have
been
many
a two-pronged
approach,in-house development
and in
M&A.
that
there
have
not been
many casesinwhich businessdivisionsi.e.,collaborated
with each other
the Givenpast, wewilllaunchresearch
and
in
which
business
divisionscollaborated
with
each
other
in
the
past,
we
will
launchresearchanddevelopment across business divisions on a project-by-project basis going forward, in an effort to create
development
acrossbusiness
divisionson a we
project-by-project
basis
going forward,
in anexecuted
effort tomainly
create innewmarkets andproducts.
Lookingahead,
will also consider
M&A—whichhas beennewmarkets
andproducts.
Lookingahead,
we
will
also
considerM&A—whichhasbeenexecuted
mainlythe Life Care business to date—by expanding the scope to include the Information Technology business inthe Life Carebusiness
date—byexpanding the scope
to includeMarket
the Information
Technology
business
Care business-related
opportunities.
domains thatare presumed
to bedomainas well,
not justtoLife
Carebusiness-related
opportunities.
Marketdomains
that andare presumed
towillbedomain as
notadjacentjust Lifetoselected
arewell,fieldsexisting
domains thatare consistent
with HOYA’s
visionmission; weselected
are fields
adjacent
to existingdomains
that toareestablish
consistent
HOYA’smission;we willseek
to enterdomains
that lookpromisingfor HOYA
its with
positionas avision
leaderandin nichemarkets
seek
to
enter
domainsthatlookpromising
for
HOYA
to
establishits
positionasaleaderinnichemarkets
and attain high profitability.
and attain high profitability.

HOYA INTEGRATED REPORT 2022

Enhancement of ESG
Enhancement of ESG

2

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Milestone in Our Growth

Persisting in Profitability
We have steadily increased profits through business portfolio management, in which we optimize theallocation of investments to meet the needs of the times and change the nature of our business quickly, andthrough a system of reviewing and improving our business on a short-term (quarterly) basis.

HOYA´s continued net profit since its TSE listing in 1973
HOYA has never reported a loss since its TSE listing.

Note: HOYA has prepared its consolidated financial statements in accordance with IFRS since the fiscal
year ended March 31, 2011, in lieu of the Japanese standard.

Change and Expansion of Business Domains
HOYA launched its business from the field of optical glass in 1941. For 80 years since its foundation, HOYA
has demonstrated the strengths of business portfolio management by expanding the domains of its
products and services in accordance with its Corporate Mission, which is to “contribute to the creation of atruly prosperous society in harmony with people, society, and nature, through the creation and innovationof businesses.”

HOYA INTEGRATED REPORT 2022

3

Copyright ©2021 HOYA GROUP

Note: HOYA has prepared its consolidated financial statements in accordance with IFRS since the fiscal
March 31,
in lieu offinancial
the Japanesestandard.
Note: year
HOYAended
has prepared
its2011,
consolidated
statementsin accordance with IFRS since the fiscal
Note: year
HOYAended
has prepared
its
consolidated
financialstatementsin accordance with IFRS since the fiscal
March 31, 2011, in lieu of the Japanese standard.
year ended March 31, 2011, in lieu of the Japanese standard.

Change and Expansion of BusinessDomains
INTEGRATEDREPORT 2022
Change and Expansion of Business Domains
HOYA
launchedits business fromthe field of Domains
optical glass in 1941. For 80 years since its foundation, HOYA
Changeand Expansion
of Businesshas
demonstrated
strengths
businessmanagementby 80
expandingthe itsdomainsof its HOYA
HOYA
launched its thebusiness
fromofthefield of portfolio
optical glassin 1941. For
years since
foundation,
HOYA
launched
its thebusiness
fromofthefield itsof portfolio
opticalglass
in 1941.
For
years
since
products
and services
inaccordancewithCorporate
Mission,
which
is to
“contributetofoundation,
the creationof ahas
demonstrated
strengths
businessmanagementby 80
expandingthe itsdomainsof its HOYA

hasdemonstrated
the instrengthsof business
managementbyexpandingthe domainsof its of a
truly
prosperous
societyinharmony
withsociety,and nature,throughthe creation
andcreation
innovation
products
and services
accordance
withpeople,
its portfolio
Corporate
Mission,which
is to “contributeto theproducts
andservicesinaccordancewithits
Corporate
Mission,
which
is
to
“contributetothecreationof aofbusinesses.”truly
prosperous society in harmony with people, society, and nature, through the creation and innovation
truly
prosperous
societyinharmony
withpeople,society,andnature,throughthecreationandinnovationof businesses.”of businesses.”

Growth Engine
Growth Engine
Business
expansion is currently driven by “awareness of differentiation” in each stage of the value
Growth scale
Enginechain,
i.e.,scale
marketselection,of technologies/products,
manufacturing
andsales.
Business
expansionis development
currently driven
by “awareness of differentiation”
in eachstageof the value
Businessscale
expansioniscurrently
drivenby“awarenessofdifferentiation”
in
each
stage
of the value
chain, i.e., market selection, development of technologies/products, manufacturing and sales.
chain, i.e., market selection, development of technologies/products, manufacturing and sales.

HOYA INTEGRATED REPORT 2022

4

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Market GrowthMarket GrowthMarket Growth and HOYA’s Potentials
Market Growth and HOYA’s Potentials
The Life Care business is expected to grow on the basis of the global aging population and improving living
The Life Carebusiness countries.
is expectedAlso,
to grow
onInformation
the basis ofTechnology
the global aging
populationand improving
standards
in emerging
in thebusiness,the market
is expectedlivingtostandards
inemerging
countries.
Also,
in
the
Information
Technology
business,themarkettogrow on the back of the progress in the miniaturization of semiconductors and the increaseisinexpected
data center

grow on theof theprogressthe miniaturizationof semiconductors
and intheincreasein datacenterdemand,etc.;backWe willmakegrowthininvestments
to achieve
higher performanceeachbusinessthanthedemand,
etc.;
We
will
make
growthinvestments
toachievehigherperformanceineachbusinessthanthemarket’s growth potential.
market’s growth potential.

Life Care
Life Care

Market growth, driven by global aging population and improving living standards in emerging
Market growth, driven by global aging population and improving living standards in emerging
countries
countries
Global Aging Population (65 and Over) and OldGlobal AgingAge
Population(65 andOver) and OldDependency
Ratio
Age Dependency Ratio

Aging global population expands the market
Aging global population expa nds the market
The aging global population is expected to boost
The aging
globalpopulation
is normal
expected to boost
demandforeyeglasses
due todemand for eyeglasses
due
to normal
deteriorationof vision by
aging.
Demand for
deteriorationof endoscopes
vision by aging.
Demandformedicalflexibleis alsoanticipatedtomedicalendoscopes
is also anticipatedrise
as a flexible
result ofpolicies to restrain
an increasetoin
rise
as
a
resultofpoliciestorestrainan increase ingovernment medical expenditures, throughgovernment
medicalg.expenditures, throughpreventive
screeninpreventive screenin g.

Source: United Nations, World Population Ageing 2019
Source: United Nations, World Population Ageing 2019

Global Middle-Class Population
Global Middle-Class Population

Emerging countries’ improving living standards
Emerging
countries’
expands themarket improving living standards
expands the market
Middle-class populations, especially in Asia, areMiddle-classAsia, areincreasing
onpopulations,the basis of especially
economic ingrowthofincreasingcountries.
on the basisof people
economic
emerging
Morewillgrowth
have ofemerging
countries.
Morepeoplewill
have medical
opportunities to buy eyeglasses or receive

opportunities
to buyeyeglasses
or receive
medicaltreatment,
which
means
expansionof businesstreatment, whichmeans expansion of business
opportunities
for HOYA.
opportunities for HOYA.

HOYA INTEGRATED REPORT 2022

5

Source: OECD DEVELOPMENT CENTRE Working Paper
Source:DEVELOPMENTCENTREPaper
No.
285 OECDTHE EMERGINGMIDDLE
CLASSWorking
IN DEVELOPINGNo.
285 THEby
EMERGING
MIDDLE CLASS IN DEVELOPING
COUNTRIES
Homi Kharas
Copyright ©2021
COUNTRIES
by HOYA
HomiGROUP
KharasSource: OECD DEVELOPMENT CENTRE Working Paper
No. 285 THE EMERGING MIDDLE CLASS IN DEVELOPING
COUNTRIES by Homi Kharas

INTEGRATED REPORT 2022
World Eyeglass Lens Market
Increase in the elderly and middle-class
population expands the market
Demand for eyeglass lenses is increasing
worldwide, due to aging of populations, higher
purchasing power supported by emerging
countries’ economic growth, rising healthconsciousness, and deterioration of vision caused
by longer screen times.
HOYA’s estimate

World Medical Endoscopes Market (Flexible,
Rigid, etc.)

More demand for minimally invasive medical
treatment drives growth in the endoscopemarketMedical expenses are increasing worldwide, alongwith aging of populations. Governments arepromoting disease prevention and early detectionof diseases, as well as minimally invasive medical
treatment. In particular the importance of thelatter is rising in popularity, as part of the trend of
reducing invasive medical treatment. Medical
flexible endoscopes, which allow physicians to

Source: Allied Market Research

diagno se and treat the patient in a less-invasive
way help to fulfill such needs.

Market Growth Drivers
Aging population

Desire for improvement of QOL andIncrease in cancer rate

minimally invasive diagnosis andInitiatives for disease prevention

treatment devices
Improved medical infrastructure in
emerging countries

Information Technology
Market growth, driven by technological advancement and expansion of application areas
The market of the Information Technology business as a whole is in a matured stage, but a closer look at
each of our products reveals potential growth sub-segments.
Sales of HOYA Mask Blanks for EUV Lithography
and Number of EUV Scanners Installed (Volume)

Mask blanks for EUV lithography
Extreme ultraviolet (EUV) lithography is atechnology used to transfer semiconductor circuit
pattern to a substrate using EUV light. It is apotential key for advanced miniaturization ofsemiconductor circuits. HOYA understands clientneeds accurately and precisely, and properly

HOYA INTEGRATED REPORT 2022

responds to technological requirements with theunderlying objective of being a leader in the market

6

Copyright ©2021 HOYA GROUP

Improved medical infrastructure in
emerging countries

INTEGRATED REPORT 2022

Information Technology
Market growth, driven by technological advancement and expansion of application areas
The market of the Information Technology business as a whole is in a matured stage, but a closer look at
each of our products reveals potential growth sub-segments.
Sales of HOYA Mask Blanks for EUV Lithography
and Number of EUV Scanners Installed (Volume)

Mask blanks for EUV lithography
Extreme ultraviolet (EUV) lithography is atechnology used to transfer semiconductor circuit
pattern to a substrate using EUV light. It is apotential key for advanced miniaturization ofsemiconductor circuits. HOYA understands clientneeds accurately and precisely, and properly
responds to technological requirements with theunderlying objective of being a leader in the market
of mask blanks for EUV lithography.

Nearline server application of glass disks for HDDs
Nearline storage is used for backup and archiving purposes. The market for nearline storage has continued
to undergo significant growth to accommodate the global surge in data volume. Memory capacity perstorage unit needs to be increased to improve the efficiency of server space in data centers. HOYA will meetsuch needs by proposing an increase in the number of disks mounted per HDD to customers ba sed on
thinner disks in an effort to increase disk shipment volume.
Trends in Data Traffic Volume

Enterprise Exabyte Shipment Volume

Data growth is accelerating on a global scale due to theprogress of 5G, artificial intelligence (AI) and othertechnologies.

HDDs will continue to play a central role in nearline
storage in the future.

Source: HOYA’s data

Source: HOYA’s data

In-vehicle camera lenses
The market for in-vehicle camera lenses is expected to grow, as they are expected to be used in sensors
required for automated driving technology. We will absorb market growth by leveraging high-value-added
glass materials and aspherical glass lenses, in which our strength lies.

Milestones in
Our GrowthMarket Growth

HOYA INTEGRATED REPORT 2022

7

Copyright ©2021 HOYA GROUP

Maximizing
Shareholder ValueINTEGRATED REPORT 2022

Maximizing Shareholder Value

Advanced Corporate Governance Structure
To ensure the effective functioning and objectivity of the management supervisory function, six out of eight
directors in total are independent outside directors. As a monitoring board, outside directors enhance thequality of corporate governance by reflecting their wealth of management experience, insight andleadership ability in management.
Independent Director

Independent Director

Lead Independent Director

Shuzo Kaihori

Mitsudo Urano

Biography

Biography

Independent Director

Independent Director

Hiroaki Yoshihara

Yasuyuki Abe

Biography

Biography

Independent Director

Independent Director

Takayo Hasegawa

Mika Nishimura

Biography

Biography

Eiichiro Ikeda

Ryo Hirooka

Biography

Biography

Background of Outside Directors
HOYA INTEGRATED REPORT 2022
8 Copyright ©2021 HOYA GROUP
Corporate
Management

GlobalBusiness

Finance/
Accounting

IT/
Technology

M&A

Developmentof HumanResources/

MedicalBiography

Biography

INTEGRATED REPORT 2022
Background of Outside Directors

Mitsudo
Urano
Shuzo
Kaihori
Hiroaki
Yoshihara
YasuyukiAbe
TakayoHasegawa

Corporate
Management

GlobalBusiness

●

●

●

●

●

●

●

●

Mika

Finance/
Accounting

M&A

Developmentof HumanResources/
Diversity

Medical

●

●

●

●

●

●

●

●

●

●

●

Nishimura

IT/
Technology

●

●

●

●

Pursuing Capital Efficiency
Return to shareholders and capital efficiency are among the key management considerations at HOYA.

Major management indicators and return to shareholders
Dividend per Share

ROE and EPS

Share Buyback

Total Shareholder Return (TSR)

HOYA INTEGRATED REPORT 2022

9

Copyright ©2021 HOYA GROUP

Mika

●

Nishimura●●●

INTEGRATED REPORT 2022

Pursuing Capital Efficiency
Return to shareholders and capital efficiency are among the key management considerations at HOYA.

Major management indicators and return to shareholders
Dividend per Share

ROE and EPS

Share Buyback

Total Shareholder Return (TSR)

This indicates the investment performance by taking
share price changes and dividends into consideration,
assuming that an index of 100 equals the amount ofinvestment on March 31, 2017.

Market Growth

Maximizing
Shareholder Value

Copyright ©2022 HOYA GROUPHOYA INTEGRATED REPORT 2022

10

Copyright ©2021 HOYA GROUP

Highlights of Fiscal 2021
INTEGRATED REPORT 2022

Highlights of Fiscal 2021

Financial

ESG

Financial

ESG

Financial
Sales

Financial

Sales Breakdown

20.7%+20.7%

Sales
Sales Breakdown+

661.5 billion yen

661.5 billion yen

The HOYA Group’s consolidated sales revenue increased 20.7% year on year to 661,466 million yen,which is a record high for the Group. The Life Care business recovered from the impact of the COVID-19
pandemic and even achieved growth compared to its pre-COVID level (i.e., fiscal 2019). Sales for the
Information Technology business increased substantially as a result of capturing strong customer
demand for mask blanks for extreme ultraviolet (EUV) lithography and glass substrates for HDDs,
The HOYA withGroup’ssales revenue
increased
20.7% year on year to 661,466 million yen,combinedthe consolidated
recovery of demandfor camera
lenses.

which is a record high for the Group. The Life Care business recovered from the impact of the COVID-19

pandemic and even achieved growth compared to its pre-COVID level (i.e., fiscal 2019). Sales for the
Information Technology business increased substant ially as a result of capturing strong customer
demand for mask blanks for extreme ultraviolet(EUV)
lithography and glass substrates for HDDs,
PretaxProfits

combined with the recovery of demand for camera lenses.

Pretax Profits Breakdown by Business

Pretax11Profits

HOYA INTEGRATED REPORT 2022

Copyright ©2021 HOYA GROUP

Information Technology business increased substant ially as a result of capturing strong customer
demand for mask blanks for extreme ultraviolet (EUV) lithography and glass substrates for HDDs,
combined with the recovery of demand for camera lenses.

INTEGRATED REPORT 2022

Pretax Profits
Pretax Profits Breakdown by Business

+

32.3%
210.7 billion yen

Pretax profit margin 31.9% (up 2.8 percentage points)

Pretax profits increased 32.3% year on year to 210,706 million yen, reaching a record high mainly due
to higher profits associated with sales growth.

Product Sales/Profit Margins/Sales Growth Rate

Note: The growth rates of sales are after exclusion of the effects of fluctuations in foreign currency
exchange rates.

Sales in the Life Care Business

+

19.2%

Copyright
407.512billionyen©2021 HOYA GROUPHOYA INTEGRATED REPORT 2022

Note: The growth rates of sales are after exclusion of the effects of fluctuations in foreign currency
exchange rates.

INTEGRATED REPORT 2022

Sales in the Life Care Business

+

19.2%
407.5 billion yen

Sales revenue in the Life Care business increased 19.2% year on year to 407,549 million yen.
Compared to the previous fiscal year, in which business activities had been impacted by COVID-19 in all
businesses, sales revenue soared due to recovery in line with the resumption of economic activities.
Also, the growth rate of sales revenue was up 8.7% compared to its pre-COVID level (i.e., fiscal 2019).

Life Care Sales Breakdown

Like-for-Likes* Sales
Growth Rate of
Products in the Life Care Business* Year-on-year comparison on the same basis as theprevious period, adjusted to eliminate the effect ofchanges in exchange rates or M&A activities.

Pretax Profits in the Life Care Business

+

35.8%
86.3 billion yen

Pretax profit margin 21.2% (up 2.6 percentage points)

Pretax profits in the Life Care business increased 35.8% year on year to 86,269 million yen.
Recovery from the COVID-19 pandemic led to a substantial increase in sales revenue, which alsotranslated into higher profits than in the previous fiscal year.

Sales in the
HOYA GROUP
Information
Technology
Business
HOYA INTEGRATEDREPORT 2022
13 Copyright ©2021

Recovery
from
COVID-19
led
to a substantial
increaserevenue,translated
intointhe
higher
profits
thanin theincreased
previous
fiscal year.
Pretax profits
theLife
Carepandemic
business
35.8%
year
on yearintosales
86,269millionwhichyen. alsotranslated
intohigher
profitsthanintheprevious
fiscalyear.
Recovery from the COVID-19 pandemic led to a substantial increase in sales revenue, which alsotranslated into higher profits than in the previous fiscal year.

Sales inthe 2022
INTEGRATEDREPORTin the BusinessInformationSales
Technology
in the BusinessInformationSales
Technology
Information Technology Business

23.6
%
23.6
%
23.6%

+
+
+ 248.4
248.4

billion yen
billion yen

248.4 billion yen

Sales in the Information Technology business increased 23.6% year on year to 248,403 million yen.
Sales increasedin the Information
Technology
business increased
23.6%
year fromon year248,403fiscal
millionyen.
in the Information
Technology
business asa wholetheto
previousyear
as a
Sales increasedin theInformation
businessasa wholefromthetopreviousyear
as aresultofthe
capturingstrongcustomerTechnology
demandmask blanks
forEUV
andfiscal
glass
substrates
inInformation
Technology
businessfor
increased
23.6%
year
onlithographyyear
248,403
millionyen.
resultof capturingstrongcustomerdemandformaskblanksfor EUV
lithography
andfiscal
glassyear
substrates
for HDDs,
combinedwiththerecoveryin demandfor camera
Sales
increasedin theInformation
Technology
business
as a lenses.
whole
from
the previous
as afor HDDs,
combinedstrong
with therecoveryin demandfor camera
resultof capturing
customerdemandfor mask
blankslenses.
for EUV lithography and glass substrates
for HDDs, combined with the recovery in demand for camera lenses.

Like-for-Like* Sales Growth Rate*
Like-for-Like
Growth Rateof Products *inSales
the Information
Like-for-LikeSales
GrowthRateof Productsin theInformation
Technology
Businessof Productsin theInformation
Technology
Business
Technology BusinessInformation Technology Sales
Information
Technology Sales
BreakdownInformation
Technology Sales
Breakdown
Breakdown* Year-on-year comparison on the same basis as theprevious
period,adjusted toon
eliminatetheeffectchanges* Year-on-yearcomparison
the same
basis
asof
the
in
exchangerates
or M&A toactivities.
previous
period,adjustedeliminatetheeffectofchanges* Year-on-year comparison on the same basis as theinexchange
rates
or
M&A
activities.
previous period, adjusted to eliminate the effect of changes
in exchange rates or M&A activities.

Pretax Profits in thePretaxTechnology
Profits in the
Information
Business
PretaxProfits in the
Information Technology
Business
Information Technology Business

29.5
%
29.5
%
29.5%

+
+
+ 122.9
122.9

billion yen

Pretax profit margin 49.5%billion(up 2.2 yenpercentage points)

122.9

Pretax profit margin 49.5%billion(up 2.2 yenpercentage points)
Pretaxprofitmargin(up million
2.2 percentage
points)Pretax profits increased 29.5%
year
on yearto 49.5%
122,886
yen dueto the effects of improved
Pretax profits
increasedfrom
29.5%
on yearto 122,886
million yen dueproducts
to the effects
of improved
product
mix stemmingtheyearincreasein salesof high-value-added
such asmask blanks

product
mix stemmingtheyearincreasein addition
salesof high-value-added
products
suchinasmask
blanksforsemiconductors
for from
EUV
lithography,
into theincreasein salesrevenuebusiness.
Pretaxprofitsincreased
29.5%
on yearto 122,886
millionyen dueto theeffects
ofeachimproved
forsemiconductorsforEUV
lithography,
inadditiontotheincreaseinsales
revenueineachbusiness.
product mix stemming from the increase in sales of high-value-added products such as mask blanks
for semiconductors
for EUV
lithography,
to the increase in sales revenue in each business.
Financialdata is available
at theIR Library in
onaddition
HOYA’s website.
Financial data is available at the IR Library on HOYA’s website.
HOYA INTEGRATED REPORT 2022

14

Copyright ©2021 HOYA GROUP

Financial data is available at the IR Library on HOYA’s website.

Highlights of Fiscal 2021
INTEGRATED REPORT 2022

Highlights of Fiscal 2021

Highlights of Fiscal 2021

Financial

ESG

Financial

ESG

Financial

ESG

ESG
ESG
ESG

Organizational
Structure
Organizational Structure

The HOYAGroup,
which
had
been
engagedininactivities
activities centeredthe
ESG
Committee
headedby by
The HOYAGroup,
which
had
been
engagedcenteredaroundaroundthe
ESG
Committee
headedthe CEO
establishedin August
2019,appointed
appointed aa Chief
Chief Sustainability
Officer(CSO)
andandnewly
the CEO
establishedin August2019,
Sustainability(ESG)(ESG)
Officer(CSO)
newly
established the ESG Promotion Office—a dedicated organization under the CSO—in the HOYA Group’s

established the ESG Promotion Office—a
dedicated organization
under the CSO—in the HOYA Group’s
Organizational
Structurehead office in March 2022, in order to accelerate sustainability/ESG initiatives. We have also developed

head office in March 2022, in order to accelerate sustainability/ESG initiatives. We have also developed
a structure to further promote ESG activities in the HOYA Group as a whole while collaborating with thea structure to further promote ESG activities in the HOYA Group as a whole while collaborating with the
ESG Promotion Office at the head office, after setting up in each business division a
The HOYAGroup,
which
in activities
centeredthe
ESG Committee
headed by
ESG
Promotion
Officeathad
the beenhead engaged
office, after
setting up
in each aroundbusiness
divisionasustainability/ESG-related department and personnel in charge in a manner suited to each business

the CEO established in August
2019, appointed
a ChiefinSustainability(ESG) Officer
(CSO)
newly
sustainability/ESG-related
department
and personnel
charge in a mannersuited toeachandbusiness
division.
establishedthe
ESG
Promotion
Office—a
dedicatedorganization
under
the
CSO—inthe
HOYAGroup’sdivision.
head office in March 2022, in order to accelerate sustainability/ESG initiatives. We have also developed
a structure to further promote ESG activities in the HOYA Group as a whole while collaborating with the
ESG Promotion Office at the head office, after setting up in each business division asustainability/ESG-related department and personnel in charge in a manner suited to each businessdivision.

HOYA INTEGRATED REPORT 2022

15

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022
Identificationof Material Issues

Identification of Material Issues
Having internally discussed and examined matters that contribute to the HOYA Group’s medium- tolong-term growth (i.e., material issues), we completed the task of identifying the material issues andHaving internally discussed and examined matters that contribute to the HOYA Group’s medium- to
obtained approval for these issues at the Board of Directors’ meeting in September 2021. We will
long-term growth (i.e., material issues), we completed the task of identifying the material issues andactively promote further efforts for each material issue on a Group-wide basis.
obtained approval for these issues at the Board of Directors’ meeting in September 2021. We will
Click here for details.
actively promote further efforts for each material issue on a Group-wide b asis.
Click here for details.

HOYA Group’s Four Material Issues
HOYA Group’s Four Material Issues

Highly Effective and Transparent Corporate Governance
Highly Effective and Transparent Corporate Governance

Proportion of
Independent Directors
Proportion of
Independent Directors

Corporate Management
Experience ofCorporate Management
Independent Directors
Experience ofIndependent Directors(6 of 8)(5 of 6)75%
75%
(6 of 8)83%
83%
(5 of 6)

Proportion of Female
Directors
Proportion of Female
Directors

Proportion of Female
Directors and Executive
Proportion of Female
Officers
Directors and Executive
Officers

Proportion of NonJapanese Directors andProportion of NonExecutive Officers
Japanese Directors andExecutive Officers(2 of 8)(3 of 10)

(1 of 10)25%
25%
(2 of 8)30%
30%
(3 of 10)10%
10%
(1 of 10)

As of June 30, 2022
As of June 30, 2022

HOYA appointed its first independent director in 1995, when corporate governance was barely

discussed in Japan. In 2003, the Articles of Incorporation were amended to stipulate that more than
HOYA appointed its first independent director in 1995, when corporate governance was barely
half of directors be outside directors. Currently, 75% of HOYA’s directors are outside directors, an
discussed in Japan. In 2003, the Articles of Incorporation were amended to stipulate that more thanextremely high level even by global standards. While many companies appoint lawyers, accountants, orhalf of directors be outside directors. Currently, 75% of HOYA’s directors are outside directors, anacademics as outside directors, HOYA’s outside director s primarily consist of persons with extensive
extremely high level even by global standards. While many companies appoint lawyers, accountants, or
experience in corporate management, the fields of which range widely from electrical equipment toacademics as outside d irectors, HOYA’s outside directors primarily consist of persons with extensive
medical care, food, trading firm and accounting. In view of gender diversity, the number of female
experience in corporate management, the fields of which range widely from electrical equipment todirectors increased from one to two, and one female was added as an executive officer. On the back of
medical care, food, trading firm and accounting. In view of gender diversity, the number of female
such diversity, lively discussions take place at meetings o f the Board of Directors.
directors increased from one to two, and one female was added as an executive officer. On the back ofsuch diversity, lively discussions take place at meetings of the Board of Directors.
HOYA INTEGRATED REPORT 2022

16

Copyright ©2021 HOYA GROUP

directors increased from one to two, and one female was added as an executive officer. On the back ofsuch diversity, lively discussions take place at meetings of the Board of Directors.

INTEGRATED REPORT 2022

Active Role Played by Diverse Human Resources
Proportion of Employees
Workingin Locations Outside
Japan

>

90%

Non-Japanese Top
Management
at Overseas Subsidiaries>

90%

Proportion of NonJapanese Heads
of Business (Business
Division CEOs)64%

At HOYA, which operates diverse businesses on a global scale, over 90% of all employees work inlocations outside Japan. In particular, Asia is home to HOYA’s major manufacturing centers producing
eyeglass lenses, HDD substrates, etc., to which approximately 70% of its employees belong. HOYA isalso promoting the appointment of local employees to top management positions at its overseas
subsidiaries, and its business divisions headed by non-Japanese nationals (as business division CEO)account for 64%.
HOYA actively recruits diverse personnel of different races, et hnic groups, nationalities, religions, etc.,
in order to gain access to exceptional global talent and create new ideas and values.

Proportion of Female Employees and Female Leaders in Japan

HOYA is increasing the proportion of female employees and leaders as part of its “Minkatsu” diversity
project to create a friendly work environment for everyone. In addition to expanded recruitment andoccupational fields for women, HOYA holds career advancement seminars for female employees, andpromotes cross-divisional exchange.
Due in part to their effects, the proportion of female employees and leaders has been steadily
improving in Japan.

Environmental
Endorsement of TCFD
HOYA INTEGRATED REPORT 2022

17

Copyright ©2021 HOYA GROUPIn November 2021, HOYA declared its support for the recommendations by the Task Force on Climaterelated Financial Disclosures (TCFD) and joined the TCFD Consortium. Currently, we are working on theDue in part to their effects, the proportion of female employees and leaders has been steadily
improving in Japan.

INTEGRATED REPORT 2022

Environmental
Endorsement of TCFD
In November 2021, HOYA declared its support for the recommendations by the Task Force on Climaterelated Financial Disclosures (TCFD) and joined the TCFD Consortium. Currently, we are working on thetask of disclosing information related to climate change in accordance with the TCFD
recommendations.
HOYA has been actively engaging in environmental preservation activities as part of its corporatesocial responsibility in order to pass on to future generations a global environment in better shape than
today. In 2021, we identified the reduction of greenhouse gas (CO 2) emissions as one of the material
issues of the HOYA Group and have since been discussing and examining activities to further reducethem in greater depth. For details on our activities, click here.

In fiscal 2021, HOYA’s CO 2 emissions (Scope 1 and 2 emissions) amounted to 425,902 tons, up 4.9%
year on year and up 1.8% compared to its fiscal 2019 level. On the other hand, CO 2 emissions per unitof net sales are on a downtrend. Of note, in order to further accelerate initiatives to reduce greenhousegas (CO 2) emissions, we have started conducting studies and holding discussions internally on
medium- and long-term targets and roadmaps. For fiscal 2022, we are implementing measurestentatively targeted at reducing annual emissions by 1% (compared to the fiscal 2019 level) until our
medium- and long-term targets are set.

External Evaluation
Status of Adoption by ESG Indexes
HOYA has been selected as a constituent of the following ESG indexes adopted by the Government Pension
Investment Fund (GPIF) of Japan.

HOYA INTEGRATED REPORT 2022

18

Copyright ©2021 HOYA GROUP

As of the end of May 2022

INTEGRATED REPORT 2022

External Evaluation
Status of Adoption by ESG Indexes
HOYA has been selected as a constituent of the following ESG indexes adopted by the Government Pension
Investment Fund (GPIF) of Japan.

As of the end of May 2022

Main ESG Rating Status
MSCI ESG rating: A (upgraded from BBB in 2019)
Sustainalytics ESG risk rating: Low Risk (upgraded from Medium Risk in 2020)
As of the end of May 2022

Other External Evaluation
Selected by GPIF’s external asset managers for “integrated report with a high degree of
improvement” for two consecutive years
Certified by the Ministry of Economy, Trade and Industry (METI) as an outstanding health andproductivity management organization for six consecutive years
R&I rating: AA
Listed at the top of the “Electronics/Precision Instruments” sector among “Most Honored
Companies” in Institutional Investor magazine*1 FTSE Russell (registered trademark of FTSE International Limited and Frank Russell Company) hereby certifies that
HOYA has qualified for inclusion in the FTSE Blossom Japan Sector Relative Index as a result of independent research.
The FTSE Blossom Japan Sector Relative Index is widely used to create and evaluate sustainable investment funds andother financial products.
*2 The inclusion of HOYA in any MSCI Index, and the use of MSCI logos, trademarks, service marks or index names herein,
do not constitute a sponsorship, endorsement or promotion of HOYA by MSCI or any of its affiliates. The MSCI Indexes
are the exclusive property of MSCI. MSCI and the MSCI Index names and logos are trademarks or s ervice marks of MSCI
or its affiliates.

Financial

ESG

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Milestones in Our Growth

HOYA INTEGRATED REPORT 2022

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Eiichiro Ikeda
Director, Representative Executive Officer, President & CEO

Could you tell us how you feel about being appointed CEO, and could you also outline
your career to date, and your key achievements? In particular, what do you think were
the reasons you were selected as the new CEO?
I had a vague feeling that, if a new CEO was appointed, it would probably be someone from outside theCompany, rather than being an internal appointment, so to be honest, when the Nominat ion Committee got
in touch with me I was very surprised.
I majored in Chemistry in university, and when I joined HOYA in April 1992 after graduating, I worked as aprocess engineer at a department involved in manufacturing magnetic recording media, as part of theMemory Disk (MD) business. In 2010, I was appointed as the head of the business, but it just so happened
that at that time this business was sold off to one of our customers. This was the first time that I had been
involved in a large-scale business transfer, but we managed to complete it successfully. In September 2010,
I was appointed head of the Optical Lens SBU. I realized a substantial improvement in its profitability, which
contributed to an improvement in the profitability of the Information Technology business domain as awhole. Th ese achievements were recognized by the Company, and in 2013 I was appointed COO of theInformation Technology business. However, at that time the Information Technology business domain was
positioned as a cash cow supporting the Life Care business domain, which was seen as a business withhigh growth potential. As a result, investment in the Information Technology business domain was limited,which h ad led to a steady decline in sales. Today, the Information Technology business domain is a key
pillar of growth for the Company, but back then many people, both outside and within the Company, were
dubious about the growth potential of products such as glass substrate for hard disks intended for use
with nearline storage, and mask blanks for use in extreme ultraviolet (EUV) lithography. Despite thes e
circumstances, by carefully selecting which business areas to focus on, after taking over as COO I was able
to get the Information Technology business back on a path of raising sales revenue and succeeded in
improving its profitability. Starting in 2018, I had the experience of running the contact lens business foraround two years, which was the first time I had worked in the Life Care business domain, and beginning in
2021 I was simultaneously in charge of research and development at the endoscope business. In this way,rather than just seeing things from the viewpoint of an executive officer, I have had an experience in a wide
range of areas within the HOYA Group from a frontline perspective. I think that this wide-ranging experienceand record of achievement were viewed positively by the Nomination Committee.

What do you see as being the CEO’s most important role? Also, could you explain whatthings you will keep the same and what you want to change? And what do you see as
being the main management issues for HOYA?
Over the course of its long history, which extends back 80 years, HOYA has focused its management

22while withdrawing from or selling off businesses
resources on those businesses where it is competitive,
HOYA INTEGRATED REPORT 2022

Copyright ©2021 HOYA GROUP

where it is uncompetitive, and in this way has been able to keep strengthening its business portfolio. This

What do you see as being the CEO’s most important role? Also, could you explain whatthings you will keep the same and what you want to change? And what do you see as
being the main management issues for HOYA?
INTEGRATED REPORT 2022

Over the course of its long history, which extends back 80 years, HOYA has focused its management
resources on those businesses where it is competitive, while withdrawing from or selling off businesses
where it is uncompetitive, and in this way has been able to keep strengthening its business portfolio. Thiseffective business portfolio management has been an important strength for HOYA and going forward I
consider business portfolio management to be the most important role for HOYA’s CEO. In par ticular, I see
the biggest aspect of my mission as being to add businesses to HOYA’s portfolio that can serve as driversof growth over the next 10–20 years. Within the HOYA Group, basically each business operates with a highdegree of autonomy but going forward we will need to generate new technologies and products that noindividual business can create on its own, and we will be putting in place an R&D framework that extends
across the boundaries between businesses. With regard to M&A, up until now we have tended to focus
mainly on the Life Care business domain, but in the future, we will be expanding our perspective to also
include the Information Technology business domain so that we can identify new business areas withstrong growth potential. We will be paying particular attention to semicon ductor-related areas, where we
can expect to create synergy with our existing business areas.
Since March 2022, we have been making efforts to strengthen our business development, under the
direction of Chief Business Development Officer (CBDO) Augustine Yee, who is also HOYA’s Chief Legal
Officer (CLO). Whereas in the past the Life Care business domain was positioned as the key growth driver,and the Information Technology business domain was positioned as the cash cow, going forward, we willconsider the positioning of each individual business and product without regard for which segment it
belongs to, and we will allocate management resources to those items which have higher growth potential.
It should be noted that our approach to decision-making, whereby decisions are made based on numericald ata in relation to profitability and return on investment, will remain unchanged in the future.
Currently, another important management issue for HOYA besides developing businesses with long-term
growth potential is the strengthening of environmental, social, and corporate governance (ESG). We havepositioned ESG initiatives as being of great importance in relation to the HOYA Group’s medium- and lon gterm purpose. In March 2022, we established a new ESG Promotion Office under the Chief Sustainability(ESG) Officer (CSO), and we are aiming to strengthen our ESG initiatives. Taking the new framework as abasis, going forward, after having set objectives corresponding to the ESG materiality that was specified in
September 2021, we will be proceeding with concrete measures in this area.
For more inf ormation about ESG, please read the message from Tomoko Nakagawa, Executive Officer andChief Sustainability (ESG) Officer.

With the negative impact on economic activity and the supply chain disruption thathave accompanied the continuing COVID-19 pandemic, together with rising raw
materials costs and logistics expenses, Russia’s aggression in Ukraine, etc., the levelof uncertainty in the global business environment is increasing. What is your thinking
on risk management for HOYA going forward?
The real value of business portfolio management lies in the diversification of risk. As the regional
breakdown of sales, customer profiles, sensitivity to the business climate and to exchange rate fluctuations,etc. all vary from business to business, effective portfolio management can make it possible to a chieve
resilience in relation to various types of uncertainty. For example, during the global financial crisis of 2008
that followed the bankruptcy of Lehman Brothers, although HOYA’s Information Technology businessdomain was seriously affected by the crisis, sales performance in the Life Care business domain, which isless vulnerable to fluctuations in the business climate, remained strong. By contr ast, when the COVID-19
pandemic began to spread around the world, the Life Care business domain was heavily affected becauseof factors such as new regulations imposed in various countries, but the negative impact on the©2021 HOYA GROUPHOYA
INTEGRATEDREPORT
23andCopyright
Information Technology
businessdomainwas2022
limited,this contributed
toward stability of the HOYA

Group as a whole. Going forward, although we can expect to see continued uncertainty due to inflation

resilience in relation to various types of uncertainty. For example, dur ing the global financial crisis of 2008
that followed the bankruptcy of Lehman Brothers, although HOYA’s Information Technology businessdomain was seriously affected by the crisis, sales performance in the Life Care business domain, which isless vulnerable to fluctuations in the business climate, remained strong. By contrast, when the COVID-19

INTEGRATED REPORT 2022

pandemic began to spread around the world, the Life Care business domain was heavily affected becauseof factors such as new regulations imposed in various countries, but the negative impact on the
Information Technology business domain was limited, and this contributed toward stability of the HOYA
Group as a whole. Going forward, although we can expect to see continued uncertainty due to inflation
caused by COVID-19 and by geopolitical factors, and due to supply chain disruption, we will continue toreview our existing systems on an ongoing basis and make changes as necessary. With regard tocompliance risk, we have put in place a Group-wide system under the direction of the Chief Compliance
Officer, who is based in the HOYA Group’s head office, and we are implementing more effective compliancerisk management.

Could you tell us about your approach to returning profits to shareholders, including
share buybacks? Also, do you have a message that you would like to give, in terms ofyour vision as the new CEO, or areas that you want to focus on?
Regarding cash allocation, our policy of prioritizing investment in areas with growth potential, and returning
surplus profits to shareholders, remains unchanged. Our approach of thinking in terms of the total amountof profits to be returned to shareholders, rather than treating share buybacks and dividends separately,
also remains the same. In the fiscal year ended March 31, 2022, we increased the year-end dividend from 45
yen to 60 yen, and also implemented share buybacks totaling over 65 billion yen, so the total shareholder
return (TSR) came to approximately 100 billion yen.
As I pointed out just now, I see the most important aspect of my mission as HOYA’s CEO as being businessportfolio management. My intention is that, while promoting the development and acquisition of businesses
that can serve as drivers of growth over the long term, we will adjust as necessary with regard tobusinesses and products where there are doubts about growth potential, and in this way build a businessportfolio that can contribute toward the sustainable growth of the HOYA Group.
I am determined that, going forward, we will continue to attach great importance to the HOYA philosophy ofemphasizing profitability and making judgments based on objective numerical data, and that we will also
manage the Company in a way that returns to the essential aspects of HOYA’s purpose. That is to say, by
providing solutions relating to people’s eyesight and other aspects of th eir health, and by providing
solutions that support the information technology that is vital to contemporary social and economic
activity, we will enhance the quality of life (QOL) of people throughout the world. HOYA celebrated the 80th
anniversary of its founding in 2021. Over the next 20 years, as we move toward our 100th anniversary, I
hope that we will create new markets and pursue innovation wit h passionate enthusiasm, so as to enhance
the QOL of people of all kinds throughout the world and help create a better tomorrow.

Interview with
HOYA’s CEO

Copyright ©2022 HOYA GROUPHOYA INTEGRATED REPORT 2022

24

Copyright ©2021 HOYA GROUP

A Message from
HOYA’s CSOINTEGRATED REPORT 2022

Tomoko Nakagawa
Executive Officer, Chief Sustainability (ESG) Officer

The position of Chief Sustainability (ESG) Officer, to which I have been appointed, was created under the
new management structure which HOYA adopted on March 1, 2022. At a time when stakeholders’awareness of sustainability or environmental, social, and governance (ESG) is rising, and whensustainability and ESG have become a management issue of growing importance to HOYA, I am eager totake on this challenge and will work to promote sustainability and ESG initiatives in the HOYA Group withthe aim of contributing to the realization of a sustainable society and enhancing HOYA’s corporate value
over the medium to long term.
The first tasks that I undertook as CSO were putting in place relevant internal systems and the formulationof a sustainability policy. In the past, individual business divisions implemented their own social
contribution activities and measures to reduce environmental impact. Now, besides formulating a Groupwide sustainability policy, we have also established an ESG Promotion Office, a dedicated organization for
promoting ESG-related sharing of best practices and collaboration between business divisions, which isbased in the HOYA Group head office. As HOYA has developed a wide range of businesses, ranging fromsemiconductor components to medical devices, sustainability/ESG initiatives and issues are not necessarily
the same in every business. For this reason, each business has established its own sustainability/ESG unit
or responsible person in a way that suits that particular business, putting in p lace the necessary systems.
Going forward, the HOYA Group head office will be collaborating with sustainability/ESG managers at eachbusiness, sharing and enhancing related know-how, and promoting activities in which the whole Group
works together as one.
In May 2022, the formulation of the HOYA Group’s sustainability policy was approved by the Board of
Directors. Over the 80 years since the Company wa s founded, HOYA has continued to expand its businessareas in line with its corporate philosophy: “Dedicated to innovation in information technology, lifestyle andculture, HOYA envisions a world where all can enjoy the good life, living in harmony with nature.” HOYA’s
mission is to contribute toward enhancing the quality of life of people throughout the world through its
products and services and by providing solutions that support eyesight and other aspects of human health,or which support contemporary information technology. Based on this corporate philosophy and approach,we have formulated a policy that incorporates items that are expected to be important for the Company’s
continued growth over the medium to long term. In the future, besides drawing up strategies and measures
based on this p olicy, we also intend to implement activities aimed at disseminating awareness within the
Company, so that employees can be more aware of sustainability in their day-to-day operations.

Sustainability Policy
HOYA Group is committed to contributing toward building a sustainable society and aims toenhance our long-term corporate value by implementing
our management principles based on our
Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2022

corporate mission in our day-to-day work.

25

we have formulated a policy that incorporates items that are expected to be important for the Company’s
continued growth over the medium to long term. In the future, besides drawing up strategies and measures
based on this policy, we also intend to implement activities aimed at disseminating awareness within the
Company, so that employees can be more aware of sustainability in their day-to-day operations.

INTEGRATED REPORT 2022

Sustainability Policy
HOYA Group is committed to contributing toward building a sustainable society and aims toenhance our long-term corporate value by implementing our management principles based on our
corporate mission in our day-to-day work.
We will aim to help resolve global social issues through innovation in our businesses.
We will realize fair and highly transparent corporate management by building a relationshipbased on trust through consistent dialogue with key stakeholders.
We will aim to minimize environmental externalities in our business activities to ensure our
future generations inherit a healthy global environment in the future.
We respect the human rights of all people involved in our business activities, including those in
our supply chain and will strive to prevent any abuse on human rights.
We will create a work environment to promote diversity and inclusion with an emphasis on the
wellbeing of our employees in the aim of keeping high motivation and moral to create newvalue.

In line with the revision of Japan’s Companies Act in 2003, HOYA transitioned speedily to become acompany with Nomination Committee, etc. and restructured it s Board of Directors so that independent
directors held over half of the seats on the Board, committing itself to management characterized by a highlevel of objectivity and transparency, with the committee system as its foundation. Going forward, I believethat HOYA will need to adopt an even more proactive approach to environmental (the “E” element of ESG)
and social (the “S” element) initiatives, a nd to related disclosure, with the Board of Directors expected to
implement regular monitoring of the content of such activities.
In the future, while strengthening our ongoing dialogue with all stakeholders, we will take HOYA’s
sustainability/ESG activities to an even higher level, aiming both to contribute to the realization of asustainable society and to enhance HOYA’s corporate value over the med ium to long term.

Interview with
HOYA’s CEO

A Message from
HOYA’s CSO

A Message froman Independent Director

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26

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Mitsudo Urano
Lead Independent Director, Chairperson of the Nomination Committee,
Member of the Compensation Committee, Member of the Audit
Committee

As an independent director, what is your assessment of HOYA’s Board of Directors?
The matters handled by the Board of Directors fall into four broad categories. The first of these is matters
stipulated by the Companies Act, such as corporate accounts and dividends. The second category isquarterly budget planning, and this is the area where there tends to be the liveliest exchange of views. While
all companies review their accounts on a quarterly basis, I am not aware of any other company that
performs the quarterly Plan–Do–Check–Act (PDCA) cycle with as much precision or as extensively as
HOYA. What is more, although this process is based around a short period of just three months, themedium- and long-term growth strategy is also incorporated into the process, so the independent directors
are ab le to point out issues and make suggestions based on their diverse perspectives. The third category is
the business review, in which the directors and executive officers engage in discussion, based not so muchon recent performance as on explanations from the division heads responsible for each business area
regarding medium- and long-term market forecasts and strategies. Finally, the fourth category is mattersrelating to business development. Projects both large and small are brought up for discussion by eachbusiness, and the directors present their views in an objective manner, making effective use of their own
respective skillsets in terms of M&A activity, international business, etc. Whatever the topic being discussed,
it is not viewed in a one-sided manner, but rather is examined from mult iple perspectives, and assessment isperformed rapidly using the PDCA cycle.

Could you tell us about the areas where you feel that HOYA excels, and about any
areas where you feel that improvements are needed?
Having had experience at various different companies, I personally feel that where HOYA excels most is in
its implementation of business portfolio management that adheres to a management philosophy of aiming
to be “a big fish in a small pond.” What I also think is marvelous is that HOYA has clear positioning for eachbusiness in its portfolio, and consciously characterizes each business as being a “star,” “cash cow” or“problem child.” As a result, the Company has been able to achieve outstanding financial performance,
including capital efficiency, which is very impressive too. With regard to corporate governance also, HOYA
was one of the earliest companies in Japan to have independent directors hold more than half of the seatson the board of directors, and to transition to a committee system, and it has continued to be seen as beingat the cutting-edge of governance. If one looks more closely at the details of HOYA’s corporate governance,
it is clear that the diversity of its independent directors, in terms of having management experience in awide range of industries and having diverse specialist backgrounds, has also contributed to strengthening
governance.
Although, as I have just noted, HOYA has received very positive assessments in relation to the governance(G) aspect of ESG, I think that in terms of the environmental (E) and social (S) aspects of ESG, HOYA has

only really kept pace with other companies, and may 27
even have lagged behind, and that there is a need for
HOYA INTEGRATED REPORT 2022

Copyright ©2021 HOYA GROUP

improvement here. As attention has been focused on the areas where HOYA excels, so fa r it has not

at the cutting-edge of governance. If one looks more closely at the details of HOYA’s corporate governance,
it is clear that the diversity of its independent directors, in terms of having management experience in awide range of industries and having diverse specialist backgrounds, has also contributed to strengthening
governance.

INTEGRATED REPORT 2022

Although, as I have just noted, HOYA has received very positive assessments in relation to the governance(G) aspect of ESG, I think that in terms of the environmental (E) and social (S) aspects of ESG, HOYA has
only really kept pace with other companies, and may even have lagged behind, and that there is a need for
improvement here. As attention has been focused on the areas where HOYA excels, so fa r it has notreceived criticism for being weaker in other areas but going forward HOYA will be aiming to speed up its
efforts to address these weaknesses. A further point is that HOYA needs to bring its succession planning up
to the standards of a global enterprise. In this regard, HOYA is making a painstaking effort to put thenecessary framework in place, with the Chief Human Resources Officer (CHRO ) playing a central role. As an
independent director and member of the Nomination Committee, I think that HOYA should make a steady,concerted effort in this area.

The primary role of an independent director is to exercise oversight over theCompany’s management. In the future, what areas do you think you will be focusingon?
The most important role of the independent directors is to remove the CEO in the event that anything
improper has occurred, so the basic precondition for being an independent director is that you must havethe necessary force of character to be able to do that if necessary. As all of HOYA’s independent directors
have extensive managerial experience, HOYA has the right system in place to allow the CEO to be removed
whenever that might prove necessary. Although during the nine years that I have been an independent
director at HOYA, the company has received a positive external assessment of its corporate governancesystem, I have always felt that there is a need for constant adjustment. Although HOYA’s corporate
governance is outstanding, I have raised the questions of whether it might be a good idea for the Board of
Directors to be chaired by an internal director (as represen tative executive officer, president & CEO),whether it would be practical to introduce an “in-house company” system or a holding company structure,
and what the response should be if something were to happen to the CEO. I think that these questions need
to be discussed again. While such discussion may lead to the conclusion that things are fine as they are
now, I think that it is important to discuss these kinds of topics from multiple different perspectives.

Given your position as an independent director, could you comment on the two
management issues that the new CEO is focusing on (i.e., the development ofbusinesses with growth potential and strengthening ESG)?
Regarding the strategy for business development, we are currently engaged in ongoing discussions of thisissue with the executive officers. One of the reasons why Mr. Ikeda was selected to become the new CEO
was that he was able to outline a clear vision and path for the HOYA Group’s growth over the medium andlong term. With regard to the Information Technology business domain, HOYA is in the process of firmly
adopting a strategy of looking for potential seeds of growth in areas outside its existing businesses, while
also realizing business development by making even more effective use of the Company’s technologicalexcellence. As regards the Life Care business domain, consideration is being given to expanding the rangeof business areas with a focus on ophthalmology. Discussion is underway based on expanding the range of
HOYA’s existing Life Care businesses, such as eyeglass lenses, contact lenses, intraocular lenses, andsurgical instruments for eye surgery, new business areas that are closely related to them, and vision-related
markets. As an independent director with expertise in the areas of international business development andM&A, I support these moves, and I want HOYA to demonstrate that it still has plenty of potential for growth.

Could you tell us which areas you think HOYA should focus on when promoting ESG?
Copyrightof©2021
HOYA GROUPand I have found that when
INTEGRATED REPORT
2022 a wide
28 range
In the past, I have hadHOYA
the opportunity
to examinecompanies,

approaching ESG it is not enough to just think “how will this be viewed by the market?” How sincere senior

surgical instruments for eye surgery, new business areas that are closely related to them, and vision-related
markets. As an independent director with expertise in the areas of international business development andM&A, I support these moves, and I want HOYA to demonstrate that it still has plenty of potential for growth.

INTEGRATED REPORT 2022

Could you tell us which areas you think HOYA should focus on when promoting ESG?
In the past, I have had the opportunity to examine a wide range of companies, and I have found that whenapproaching ESG it is not enough to just think “how will this be viewed by the market?” How sincere senior
management are about ESG is extremely important, and if this sincerity is lacking, ordinary employees will
not be convinced by the ESG message.
The last 10 years or so have seen the emergence, particularly in the United States, of the “benefit
corporation” (an enterprise that aims to generate not only economic benefits but also environmental and/or
social benefits) concept, a concept that is exemplified by Patagonia, Inc., the outdoor clothing andequipment vendor. This may be the ultimate expression of ESG an d can probably be said to be in conformity
with the trend away from capitalism that emphasizes shareholders’ interests above all else toward
stakeholder capitalism.
A further point is that I believe that, fundamentally speaking, ESG cannot be successful without respect forother living beings and without a perspective that views the world as an integrated system. Over the past
300 years, a single species—mankind—has caused extensive destruction to the global environment and has
deprived other species of their right to existence. The fact is that scientific and technological developmentin human society has brought about a fundamental transformation in global ecosystems. However, I believethat science and technology also have the power to solve this problem. Some people would say that “aprofit-oriented organization like a corporation cannot solve the world’s environmental problems,” but as I
see it, business enterprises are the organizations that can most effectively address social issues in theirown particular fields of expertise. I am convinced that it is actually business enterprises that are the bestorganizations for realizing a sustainable planet. While HOYA specified its materiality in September 2021, I
think that the Company will need to keep adding to and adjusting its materiality. HOYA has a wide range ofdifferent businesses, each of which has different material issues, so I see this as being an issue that needs
to be discussed at the level of the individual business division.

As Chair of the Nomination Committee, could you explain the reasons behind theselection of the new CEO?
The deciding factor was Mr. Ikeda’s expertise and strong track record across a wide range of different
businesses. He has performed outstandingly, not only with regard to technology but also in terms of hisability to read the market and the way he interacts with customers. In particular, although the former CEO
Mr. Suzuki unquestionably played a leading role in driving the growth of HOYA’s Informa tion Technology
business division, Mr. Ikeda’s contribution was also very substantial.
Something else which can safely be said to be one of Mr. Ikeda’s strengths is his ability to take a wideranging view of the HOYA’s business portfolio as a whole, from a perspective that emphasizes technologicalsuperiority, by utilizing the experience he has accumulated in overseeing technology development for the
HOYA Group as a whole, including the Life Care business domain. A further point I would like to add is that I
was very impressed by some of the statements that Mr. Ikeda made while he was serving concurrently ashead of HOYA’s contact lens business (the “eyecity” brand). The perceptiveness that Mr. Ikeda
demonstrated by pointing out, within a short time after taking over as head of the business, that with thechanges in the market environment such as the growth of e-commerce, it was time to reconsider thebusiness strategy (including its future store opening plans), left a deep impression on me. Adding to this his
familiarity with HOYA’s management philosophy and with the Company’s mechanisms, I felt that Mr. Ikeda
was the ideal choice to become HOYA’s new CEO.
HOYA INTEGRATED REPORT 2022

29

Copyright ©2021 HOYA GROUP

At the most recent General Meeting of Shareholders (held in June 2022), the structureof the Board of Directors was changed, with the addition of a second internal directorbusiness strategy (including its future store opening plans), left a deep impression on me. Adding to this his
familiarity with HOYA’s management philosophy and with the Company’s mechanisms, I felt that Mr. Ikeda
was the ideal choice to become HOYA’s new CEO.

INTEGRATED REPORT 2022

At the most recent General Meeting of Shareholders (held in June 2022), the structureof the Board of Directors was changed, with the addition of a second internal director
and a second female independent director. Could you outline the background to thischange?
Regarding the increase in the number of internal directors, Mr. Ikeda expressed a desire to have Mr. Ryo
Hirooka join the Board. In the past, the Chief Financial Officer (CFO) did serve as a member of the Board,and Mr. Hirooka was already sitting in on every Board meeting, including those at which quarterly budgets
were discussed; furthermore, his appointment would not upset the balance between independent directors
and internal directors, so we as external directors did not feel that there was anything wrong with this idea,
and in fact w e thought it was a good suggestion.
With regard to the independent directors, finding suitable female candidates for directorships who possess
the necessary insight and experience in relation to governance, business development, and global businesshas been a long-standing challenge for HOYA. Every year, when compiling a list of potential candidates andexchanging views, we have found that there are r elatively few women on active service in Japan who havethe necessary experience in business development and business management, and due to the shortage ofcandidates, we have had to extend the scope of our search to include women working overseas. This year,
we invited Ms. Takayo Hasegawa, who is one of very few women in Japan with a high level of expertise inboth technology and management, and Ms. Mika Nishimura, who has extensive global business experience,
mainly in the United States, to become independent directors.

Finally, do you have a message for the readers of this report?
Rather than allowing itself to become complacent, HOYA is implementing managerial reforms so that it cancontinue to demonstrate outstanding performance in the future and realize sustainable growth. HOYA is
currently fine-tuning a market-focused growth strategy for the Information Technology business domain,
where the Company has a significant technological advantage, and also for eye care-related businesses,
where strong structural growth is anticipated, and I am confident that you will be impressed by thesestrategies when they are finalized. By integrating the business growth strategy and the ESG strategy, theCompany will be managed in a way that contributes toward addressing the social issues highlighted in the
United Nations Sustainable Development Goals (SDGs), and we look forward to receiving the continued
support of all stakeholders.

A Message from
HOYA’s CSO

A Message froman Independent Director

Copyright ©2022 HOYA GROUPHOYA INTEGRATED REPORT 2022

30

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Vision: Innovating for a Better Tomorrow

Support health

Medium-term Targets

ESG/Sustainability
Enhancement of E and S

Determination of KPIs
and enhancement ofinitiatives for four material
issues of ESG

Output/Outcome

Social Value(fiscal year ended March 31, 2022)

Operating cash flows:

661.5 billion yen
Sales revenue:
210.7 billion yen
Pretax profits:
31.9 %
Percentage of pretax profits:
22.1 %
ROE:
190.1 billion yen

Economic Value

High-precision photomasks and mask blanks that help improve
efficiency and save energy in semiconductors that are indispensablefor the information society, and increased capacity of storage basedon glass substrates for HDDs that are essential for data accumulation.

“Information Society and IoT”

Contribute to early detection of the state of diseases by endoscopes,
as well as healthy life-span and quicker postoperative recovery ofpeople by minimally invasive medical treatment, etc.

“Health”

Support the eyesight of approx. 100 million people per year throughproducts in the ophthalmologic field such as eyeglass lenses, contactlenses and intraocular lenses“Vision”

Support the information society and IoTValue Chain

Boost market positioning
in Life Care business, andimprove profitability of
medical business

Growth Strategy

Awareness of differentiation in each value chain

Enhance initiatives inthree fields

・Business portfolio management

Sales

Manufacturing

Development oftechnologies/
products➡ Stable growth through flexible
portfolio reshuffling➡ Diversification of risks andopportunities by rolling out awide range of businesses
・Quarterly review system➡ Steady growth through ashort-term Plan-Do-Check-Act(PDCA) cycle based on along-term growth scenario➡ Optimal allocation ofmanagement resources

Solid Corporate
GovernanceIntegrating ESG strategy into growth strategy and business activities

・Development of products by striking
a balance between product-oriented
and market-oriented approaches
・Know-how for mass production at
low cost
・Fine-tuning of manufacturing processoptimized for HOYA products
・Consultation-based marketing and sales
・Feedback for product development
and improvement

・Ability to select and identify niche
Market selection
markets in which HOYA’s strengths
can be leveraged

Develop and acquirelong-term growthbusinesses

Support vision

Mission: Improve the quality of life (QOL) of people around the world by resolving social issues in three fields through business activities

Input
Management Capital
HOYA’s Strengths• Advanced optics technology nurtured
over 80 years. Precision processing
technology for glass, plastics, etc.
• Know-how for mass production at low
cost, with stable quality• Profitability-oriented culture, which is
widely instilled among employees.
Ability to flexibly adapt to costs in theevent of emergencies
Management Capital Data
• Human capital 38,376 employees• Manufacturing capitalOver 50 production sites worldwide
Annual capital investments: Approx.
30 billion yen• Financial capital
Generates annual FCF of approx. 160
billion yen
Strong financial base
D/E ratio: 0.03
R&I rating: AA• Intellectual capital
Approx. 7,700 patents
Annual R&D expenses: Approx. 25
billion yen• Social and related capital
Cooperation with customers,
suppliers, local governments andother stakeholders based onrelationship of trust

Reinvestment to strengthen management capital

Copyright ©2021 HOYA GROUP

31

HOYA INTEGRATED REPORT 2022

HOYA’s
HOYA’s ESG
ESG Approach
Approach
HOYA’s ESG Approach
Organizational Structure and Policy
Organizational Structure and Policy
INTEGRATED REPORT 2022
Organizational Structure and Policy

HOYA’sESG
Approach
The HOYA Group,
which hadbeen engaged in environmental, social, and governance (ESG) activities
HOYA’s ESG Approach

The HOYA Group, which had been engaged in environmental, social, and governance (ESG) activities
centered around the ESG Committee established in August 2019, appointed a Chief Sustainability (ESG)
centeredaroundthe ESGhad
Committee
establishedin August 2019,
appointed
a Chief Sustainability
(ESG)
The
HOYA
Group,
been engaged
in Promotion
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Officer(CSO)
andwhich
newly establishedthe ESG
Office—a
dedicatedorganization
the CSO—in
Officer
(CSO)
and
newly
establishedthe
ESG
Promotion
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under
the
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established
August2019, appointed
a Chief We
Sustainability(ESG)
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HOYAaround
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in andMarch2022, in oinrderto accelerate
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HOYAGroup’shead
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in
March
2022,
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o
rder
to
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ESGnewly
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in parallel
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ininparallelwith collaboration
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HOYA
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March
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o
rder
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will
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afterHOYA
settingup
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andpersonnel
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The
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had been
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activities
HOYA
Group’s
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in beenparallelwithcollaboration
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division.
centeredaroundthe
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establishedinAugust2019,
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aftercenteredsetting up
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and personnel
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establishedin August 2019, appointed
a Chief Sustainability(ESG)
Officer(CSO)
andandnewly
establishedtheOffice—adedicateddedicatedorganization
under
the CSO—inina mannersuitedto newlyeachbusiness
division.
Officer(CSO)
establishedtheESG
ESGPromotion
Promotion Office—aorganization
under
the CSO—in
the HOYAGroup’shead
officein inMarchaccelerateESG
ESGinitiatives.
initiatives.
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officeMarch2022,
2022,ininordero rder toto accelerate
WeWewillwill
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ESGESG
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collaboration between
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upeachin eachbusiness
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andpersonnel
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in a mannersuitedto eachbusinessdivision.
division.
in a mannersuitedto eachbusiness

Sustainability Policy
Sustainability Policy
Sustainability Policy
For the purpose of clearly stipulating the HOYA Group’s basic stance and policy on sustainability and
For the purpose of clearlystipulating the HOYA Group’s basic stance and policy on sustainability and
PolicyfurtherSustainability
promoting sustainability
activities, we established the HOYA Group’s Sustainability Policy in May
furtherpromotingactivities,
we establishedthestance
HOYA Group’s
Sustainability
Policyandin MayFor
the purposeof sustainability
clearly stipulating
the HOYAGroup’s basic
and policy
on sustainability
2022.
2022.
furtherpromoting sustainability
activities, we established the HOYA Group’s Sustainability Policy in May
Sustainability
PolicyFor the purpose of clearly stipulating the HOYA Group’s basic stance and policy on sustainability and2022.

further promoting sustainability activities, we established the HOYA Group’s Sustainability Policy in May

2022.
HOYA Group is committed to contribute towards building a sustainable society and aims to
For thepurposeofisclearlystipulating
the HOYAGroup’sbuilding
basic stanceand policy
on sustainability
HOYA
Group
committed
to contributetowardsa sustainable
society
and aims to andenhance our long-term corporate value by implementing our management principles based on ourfurtherpromotingsustainability
activities,
weestablishedthe
HOYAGroup’s
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value byimplementing
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committed
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and aims
to on
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We will aim to help resolve global social issues through innovation in our businesses.
corporate
our day-to-day
work. issues through innovation in our businesses.
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to helpinresolve
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We will realize fair and highly transparent corporate management by building a relationship
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ouremployees
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We respectvalue. the human rights of all people involved in our business activities, including those invalue.
For HOYA’s
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clickrights.
here.
our supply
chain
and willManagement
strive to prevent
any abuseon humanFor HOYA’s Corporate Mission, Management Principles and Vision, click here.
We will create aHOYA
workINTEGRATED
environment
to promote
diversity
andinclusion
with an emphasis on the
Copyright©2021
HOYA GROUPREPORT
2022
32
For HOYA’s
Corporate
Mission,Management
Principles
andFor HOYA’s
Corporate
Mission,Management
Principles
and Vision,
Vision,click
clickhere.
here.
wellbeing of our employees in the aim of keeping high motivation and moral to create newvalue.

For HOYA’s Corporate Mission, Manag ement Principles and Vision, click here.

INTEGRATED REPORT 2022

Material Issues

Having internally discussed and examined matters that contribute to the HOYA Group’s medium- to longterm growth (i.e., material issues), we identified four material issues with the approval of the Board of
Directors in September 2021.
Process of Identifying Material Issues
Get a grasp of changes in society and issues related to HOYA’s
businesses.
Analyze ESG rating agencies’ evaluation of HOYA and refer tointernational guidelines*1.
Interview the management of business divisions.
Use the industry-by-industry Materiality Map *2 by SASB *3 that matches
HOYA’s businesses and select the candidate issues based on evaluation
on two axes, i.e., by mapping stakeholders’ interest on the vertical axis
and the impact on HOYA’s businesses on the horizontal axis.
Conduct an evaluation comprehensively by deepening internal
discussions while referring to opinions and feedback obtained frominvestors in and outside Japan who are key stakeholders.
Obtain approval for the identified four material issues at the Board of
Directors’ meeting.
*1 SASB, GRI, IIRC, ISO26000, TCFD, RBA, CDP*2 Industries: Medical Equipment & Supplies, Hardware, Semiconductors*3 Sustainability Accounting Standards Board

Identified Material Issues
Four material issues have been identified in HOYA as a result of the above process.

Risks and Opportunities of Material Issues
In consideration of the social issues worldwide and HOYA’s business environment, we examined anddiscussed the following risks and opportunities in the process of selecting material issues.

Material Issue

Risk

Opportunity

Greenhouse gas (CO 2 ) emissions

Laws, regulations and industry

Electricity-saving production

customers might become
tougher, and if they are not

reduction

reduction©2021 HOYA GROUPHOYA INTEGRATED REPORT
2022
rules and/or
demands
fromprocesses lead to cost
33 CopyrightINTEGRATED REPORT 2022
Risks and Opportunities of Material Issues
In consideration of the social issues worldwide and HOYA’s business environment, we examined anddiscussed the following risks and opportunities in the process of selecting material issues.

Material Issue

Risk

Opportunity

Greenhouse gas (CO 2 ) emissions

Laws, regulations and industry
rules and/or demands from
customers might become
tougher, and if they are notaddressed, it might diminish
the competitiveness of HOYA’s
products/services and/or
HOYA’s social credibility

Electricity-saving production
processes lead to cost
reduction

reduction

Carbon tax and/or carbon
pricing (e.g., emissions trading
scheme) might be introduced
more widely
If any inadequacy/defect in a
product occurs, or if an
incident involving
noncompliance with laws,
regulations or standards
arises, it might give rise tocosts of recall and/or diminish
HOYA’s social credibility

Product quality and safety

Thorough compliance withlaws, regulations, industry
rules, etc. and execution ofbusiness activities in a soundmanner help enhance
corporate valueLaws, regulations, standards,
etc. related to product quality
and safety might become
tougher
Employee engagement anddiversity & inclusion

Supply chain management

Competition to secure highly
talented human resources
might intensify on a global
scale

Increase in opportunities forvalue creation and innovation
brought about by securing anddeveloping diverse humanresources

HOYA might be suspended
from trading or its social
credibility might be diminishedby the impact of violation oflaws and regulations and/or
infringement of human rights,
etc. in the supply chain

A stable supply of components
being secured and asustainable production systembeing established by building a
relationship based on trustwith suppliers

Approach to and Measures for Material Issues
Material Issue

Approach

Measures

Greenhouse gas (CO 2 )Set a medium- and long-emissions reduction

term target for CO 2

Replace production
equipment with units
that have high energy
efficiency

emissions reduction andcreate a roadmap toachieve it
HOYA INTEGRATED REPORT 2022

Set measures and KPIs

Consider and promote©2021 HOYA GROUP
the introductionof
34 Copyright

renewable energy
Switch lighting toRelevant SDGs

laws and regulations and/or
infringement of human rights,
etc. in the supply chain

relationship based on trustwith suppliers

INTEGRATED REPORT 2022
Approach to and Measures for Material Issues
Material Issue

Approach

Measures

Greenhouse gas (CO 2 )Set a medium- and long-

Replace production
equipment with units
that have high energy
efficiency

emissions reduction

term target for CO 2
emissions reduction andcreate a roadmap toachieve it
Set measures and KPIs
to achieve the target
and steadily implement
the measures andmonitor KPIs

Product quality andReview and improve thesafetyproduct safety andquality management
system and operations
on an ongoing basis—
especially in the Life
Care business, which
deals in medical
products—so that
customers can use
products more

Consider and promote
the introduction ofrenewable energy
Switch lighting toLEDs, promote ecocars for company
vehicles, etc.
Promote disclosures
based on TCFD
recommendations
Enhance the quality
management system
on an ongoing basis
in response tochanges inregulations
MaintainISO9001/13485
certification byenhancing internal
QMS audit

effectively and safely
Employee engagementand diversity & inclusion

Aim at creating aworkplace environment
in which diverse
employees can fully
demonstrate theircapabilities with a senseof fulfillment from workso that employees’
growth also translates
into HOYA’s growth

Supply chain

Properly manage themanagement

supply chain based on
the HOYA Supplier Codeof Conduct, from theviewpoint of complying
with laws andregulations andConduct employee
engagement surveys
and implement
measures in responseto analyses of survey
results
Promote the“Minkatsu” diversity
project to create awork environment inwhich everyone canplay an active role
(mainly targeted atworkplaces in Japan)
Encourage suppliers
to abide by the HOYA
Supplier Code of
Conduct and obtain
their signatures
Conflict minerals
surveyprotecting human rights
not only internally but
also in the REPORT
supply 2022
chain 35HOYA INTEGRATED

Copyright ©2021 HOYA GROUP

Relevant SDGs

growth also translates

work environment inwhich everyone canplay an active role
(mainly targeted atworkplaces
INTEGRATED REPORT
2022 in Japan)

into HOYA’s growth

Supply chain

Properly manage themanagement

supply chain based on

Encourage suppliers
to abide by the HOYA
Supplier Code of
Conduct and obtain
their signatures

the HOYA Supplier Codeof Conduct, from theviewpoint of complying

Conflict minerals
surveywith laws andregulations andprotecting human rights
not only internally but
also in the supply chain

Measures and targets/indexes for material issues will be additionally set and reviewed in the process ofholding discussions and carrying out initiatives in-house.
As HOYA’s businesses are wide-ranging, we will also discuss and examine individual sustainability/ESG
issues in each business division on top of the common material issues.

Copyright ©2022 HOYA GROUPHOYA INTEGRATED REPORT 2022

36

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Corporate Governance
Basic Views

HOYA promotes management with the aim of maximizing its corporate value based on the recognition that
corporate governance is a matter of utmost importance for management. As the basis of taking a fairapproach to stakeholders, to prevent management from being conducted based solely on in-house logic, wehave set forth in the Articles of Incorporation that a majority of directors consist o f independent directors,
who actively supervise management by executive officers and provide advice in order to improve corporate
value from an objective and broad perspective. HOYA also gives executive officers the authority andresponsibility for the execution of operations, in order to accelerate decision-making and improve
management efficiency.
The Company has established the HOYA Corporate Governance Guidelines at the meeting of the Board of
Directors, and intends to enhance the corporate governance structure and to introduce better governancesystems by revising the guidelines.

Structure

HOYA employs a company with Nomination Committee, etc. management system. Under a company with
Nomination Committees, etc. management system, by giving executive officers authority to manage
business, business decision-making is accelerated. At the same time, three committees—the Nomination
Committee, the Compensation Committee, and the Audit Committee—were established, with a majority ofthe members being independent directors (at HOYA, the committees are composed exclusively of
independent directors), to ensure the effectiveness of management supervision by the Board of Directors.
Ad opting a company with Nomination Committees, etc. management system enables us to clearly separate
the execution and supervision of corporate management, whereas this was not possible with the previous
company with Auditors system. Through this system, we aim to ensure efficient management and improve
the overall soundness and transparency of management.
Corporate Governance Structure (As of the end of June 2022)

HOYA INTEGRATED REPORT 2022

37

Copyright ©2021 HOYA GROUP

Basic View

Board of Directors

INTEGRATED REPORT 2022

Board of Directors

Board of Directors
Our Board of Directors comprises six outside directors and two internal directors, totaling eight directors. In
principle, the Board holds 10 regular Board meetings per year. Each meeting of the Board of Directors
involves lively discussions and deliberations in a solemn atmosphere, where globally-minded outside
directors with a wealth of management experience ask questions and give advice on the execution ofoperations by executive officers from various angles. The Board of Directors also works to obtain necessary
information as appropriate on the developments in significant legal revisions and trends in corporate
governance through lectures given by outside experts and other means.
In fiscal 2021, the Board of Directors was comprised of five independent directors—including one female
independent director— and one internal director. Board of Directors’ meetings were convened nine times,
with 100% attendance by all directors.
Based on the Board of Directors Regulations, the Board of Directors not only addresses statutory matters
but also approves quarterly budgets and quarterly earnings reports, deliberates on M&A projects and theexecutive organization, and receives reports on the activity status and medium- to long-term plans of eachbusiness division. Self-assessment is conducted annually in the form of a questionnaire survey on the
management and effectiveness of the Board of Directors and the three committees; however, due to thechange of the CEO in March 2022, their effectiveness was evaluated by a third party, including interviews
with directors and executive officers. Due to the timing of the change, the results of this evaluation wil be
included in the Corporate Governance Report to be issued at the end of September.

Board Member Profiles

Lead Independent Director,
Chairperson of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee

Mitsudo Urano(Born on Mar. 20, 1948)

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetings

9 years

5,000 shares

9/9 times (100%)

Apr. 1971

Joined Nippon Reizo Kabushiki Kaisha (present Nichirei Corporation)

Jun. 1999

Director and General Manager, Strategic Planning Division of Nichirei Corporation

Jun. 2001

Representative Director and President of Nichirei Corporation

Jan. 2005

Representative Director and President of Nichirei Corporation, and Representative Director and

Apr. 2007

Representative Director and President of Nichirei Corporation , and Director and Chairman ofJun. 2007

Representative Director and Chairman of Nichirei Corporation, and Director and Chairman ofJun. 2013

Advisor of Nichirei Corporation (retired in March 2018)

Jun. 2013

Director of the Company (present post)

President of Nichirei Foods Inc.
Nichirei Foods Inc.
Nichirei Foods Inc.

Important Positions of Other Companies Concurrently Held
Outside Director of Hitachi Transport System, Ltd.
HOYA INTEGRATED REPORT 2022
Reason for the Selection
for Director

38

Copyright ©2021 HOYA GROUP

Mr. Urano focused on capital efficiency from the early stage in Nichirei Corporation, a leading Japanese frozenmanagement and effectiveness of the Board of Directors and the three committees; however, due to thechange of the CEO in March 2022, their effectiveness was evaluated by a third party, including interviews
with directors and executive officers. Due to the timing of the change, the results of this evaluation wil be
included in the Corporate Governance Report to be issued at the end of September.

INTEGRATED REPORT 2022

Board Member Profiles

Lead Independent Director,
Chairperson of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee

Mitsudo Urano(Born on Mar. 20, 1948)

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetings

9 years

5,000 shares

9/9 times (100%)

Apr. 1971

Joined Nippon Reizo Kabushiki Kaisha (present Nichirei Corporation)

Jun. 1999

Director and General Manager, Strategic Planning Division of Nichirei Corporation

Jun. 2001

Representative Director and President of Nichirei Corporation

Jan. 2005

Representative Director and President of Nichirei Corporation, and Representative Director andPresident of Nichirei Foods Inc.

Apr. 2007

Representative Director and President of Nichirei Corporation , and Director and Chairman of
Nichirei Foods Inc.

Jun. 2007

Representative Director and Chairman of Nichirei Corporation, and Director and Chairman of
Nichirei Foods Inc.

Jun. 2013

Advisor of Nichirei Corporation (retired in March 2018)

Jun. 2013

Director of the Company (present post)

Important Positions of Other Companies Concurrently Held
Outside Director of Hitachi Transport System, Ltd.

Reason for the Selection for Director
Mr. Urano focused on capital efficiency from the early stage in Nichirei Corporation, a leading Japanese frozen
food manufacturer, and developed efficient management through company split-ups and informatization. He
particularly has extensive experience and solid achievements on management informatization. In addition to
the achievements in Nichirei Corporation, the Company’s Nom ination Committee expects that he will make agreat contribution to enhance management efficiency and transparency through giving advice and proposals
on overall company management with his deep insight and extensive experience as management having served
as an outside director and outside corporate auditor in other companies listed on the First Section of the Tokyo
Stock Exchange.

Independent Director,
Chairperson of the Compensation Committee,
Member of the Nomination Committee,
Member of the Audit Committee

Shuzo Kaihori(Born on Jan. 31, 1948)

Apr. 1973

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetings

7 years

1,000 shares

9/9 times (100%)

Joined Yokogawa Electric Works Ltd. (present Yokogawa Electric Corporation)

Apr. 2005

Vice President, Head of IA Business Headquarters of Yokogawa Electric Corporation

Apr. 2006

Senior Vice President, Head of IA Business Headquarters of Yokogawa Electric Corporation

Jun. 2006

Copyright ©2021
HOYA GROUPINTEGRATEDREPORT 2022
DirectorHOYA
and SeniorVice President,
Head ofIA Business
Headquartersof Yokogawa Electric39

Corporation
Apr. 2007

Representative Director, President and Chief Executive Officer of Yokogawa El ectric Corporation

INTEGRATED REPORT 2022

Independent Director,
Chairperson of the Compensation Committee,
Member of the Nomination Committee,
Member of the Audit Committee

Shuzo Kaihori(Born on Jan. 31, 1948)

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetings

7 years

1,000 shares

9/9 times (100%)

Apr. 1973

Joined Yokogawa Electric Works Ltd. (present Yokogawa Electric Corporation)

Apr. 2005

Vice President, Head of IA Business Headquarters of Yokogawa Electric Corporation

Apr. 2006

Senior Vice President, Head of IA Business Headquarters of Yokogawa Electric Corporation

Jun. 2006

Director and Senior Vice President, Head of IA Business Headquarters of Yokogawa Electric

Apr. 2007

Representative Director, President and Chief Executive Officer of Yokogawa El ectric Corporation

Apr. 2013

Representative Director, Chairman and Chief Executive Officer of Yokogawa Electric Corporation

Corporation

Apr. 2015

Director, Chairman of Yokogawa Electric Corporation

Jun. 2015

Director of the Company (present post)

Jun. 2016

Director and Chairman of the Board of Yokogawa Electric Corporation (retired in June 2018)

Important Positions of Other Companies Concurrently Held
Outside Director of Eisai Co., Ltd.

Reason for the Selection for Director
Mr. Kaihori assumed the presidency of Yokogawa Electric Corporation, which operates a test and measurementbusiness and industrial automation and control business, in 2007 when the company faced difficult businessconditions, then was committed to turning around the company and achieved a surplus by changing thebusiness model from hardware to so ftware and promoting globalization. The Company’s Nomination
Committee expects that he will contribute greatly to the Company’s management from his performance that heboldly responded to changes in the business environment and achieved results and by giving advice on
strengthening of software business, which is a challenge for the Life Care segment, an area expected to grow,based on his extensive ex perience.

Independent Director,
Chairperson of the Audit Committee,
Member of the Nomination Committee,
Member of the Compensation Committee,
Chairperson of the Healthcare Compliance Committee

Hiroaki Yoshihara(Born on Feb. 9, 1957)

Nov. 1978

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetings

4 years

0 shares

9/9 times (100%)

Joined Peat Marwick Mitchell & Co.

Jul. 1996

National Managing Partner, the Pacific Rim Practice of KPMG LLP

Oct. 1997

Board Member of KPMG LLP

Oct. 2003

Vice Chairman and Global Managing Partner of KPMG International (retired in April 2007)

Jun. 2018

Director of the Company (present post)

Important Positions of Other Companies Concurrently
Held
Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2022
Outside Director of Hitachi, Ltd

40

INTEGRATED REPORT 2022

Independent Director,
Chairperson of the Audit Committee,
Member of the Nomination Committee,
Member of the Compensation Committee,
Chairperson of the Healthcare Compliance Committee

Hiroaki Yoshihara(Born on Feb. 9, 1957)

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetings

4 years

0 shares

9/9 times (100%)

Nov. 1978

Joined Peat Marwick Mitchell & Co.

Jul. 1996

National Managing Partner, the Pacific Rim Practice of KPMG LLP

Oct. 1997

Board Member of KPMG LLP

Oct. 2003

Vice Chairman and Global Managing Partner of KPMG International (retired in April 2007)

Jun. 2018

Director of the Company (present post)

Important Positions of Other Companies Concurrently Held
Outside Director of Hitachi, Ltd

Reason for the Selection for Director
Mr. Yoshihara has long-term experience as an expert in finance and accounting as well as management
experience gained as Global Managing Partner of an international accounting firm. He also has a track recordof participating in the M&A of many companies from a professional standpoint. The Company’s Nomination
Committee expects that he will contribute to the improvement of the supervisory function o f the Board of
Directors of the Company and at the same time provide plenty of advice in regard to M&A, an importantmeasure in the Company’s business strategy,

Independent Director,
Member of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee,
Member of the Healthcare Compliance Committee

Yasuyuki Abe(Born on Apr. 17, 1952)

Apr. 1977

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetings

1 year0 shares

7/7 times

Joined Sumitomo Corporation

Jun. 2002

Representative Director and President of Sumisho Electronics Co., Ltd. (present SCSK Corporation)

Apr. 2005

Representative Director and President of Sumisho Computer Systems Corporation (present SCSK

Jun. 2009

Representative Director, Managing Executive Officer, General Manager, Financial & Logistics

Apr. 2010

Representative Director, Managing Executive Officer, General Manager, New Industry Development &Apr. 2011

Representative Director, Senior Managing Executive Officer, General Manager, New Industry

Corporation)
Business Unit of Sumitomo Corporation
Cross-function Business Unit of Sumitomo Corporation
Development & Cross-function Business Unit, General Manager, Financial Service Division of
Sumitomo Corporation
Apr. 2013

Representative Director, Senior Managing Executive Officer, General Mana ger, Corporate Planning &Jun. 2015

Copyright
INTEGRATEDREPORT 2022
AdvisorHOYA
of Sumitomo
Corporation(retired 41
in June2018)©2021 HOYA GROUP

Jun. 2021

Director of the Company (present post)

Coordination Group of Sumitomo Corporation

INTEGRATED REPORT 2022

Independent Director,
Member of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee,
Member of the Healthcare Compliance Committee

Yasuyuki Abe(Born on Apr. 17, 1952)

Apr. 1977

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetings

1 year0 shares

7/7 times

Joined Sumitomo Corporation

Jun. 2002

Representative Director and President of Sumisho Electronics Co., Ltd. (present SCSK Corporation)

Apr. 2005

Representative Director and President of Sumisho Computer Systems Corporation (present SCSK

Jun. 2009

Representative Director, Managing Executive Officer, General Manager, Financial & Logistics

Apr. 2010

Representative Director, Managing Executive Officer, General Manager, New Industry Development &Apr. 2011

Representative Director, Senior Managing Executive Officer, General Manager, New Industry

Corporation)
Business Unit of Sumitomo Corporation
Cross-function Business Unit of Sumitomo Corporation
Development & Cross-function Business Unit, General Manager, Financial Service Division of
Sumitomo Corporation
Apr. 2013

Representative Director, Senior Managing Executive Officer, General Mana ger, Corporate Planning &Jun. 2015

Advisor of Sumitomo Corporation (retired in June 2018)

Jun. 2021

Director of the Company (present post)

Coordination Group of Sumitomo Corporation

Important Positions of Other Companies Concurrently Held
Advisor of ORANGE AND PARTNERS CO., LTD.
Outside Director of SUBARU CORPORATION

Reason for the Selection for Director
Mr. Abe was primarily engaged in the electric power, machinery, and information fields at Sumitomo
Corporation, a general trading company. After being stationed twice in the United States, he served as
representative director and president of the company’s electronics and information-related subsidiaries.
Subsequently, as a representative director of Sumitomo Corporation, he was engaged in the company’s
financial, logistics and new business developmen t. The Company’s Nomination Committee has judged that hewill contribute to the Board of Directors of the Company through his wide-ranging experience at the general
trading company, his global mindset cultivated over the years of stay in the United States, his businessexperience nurtured as a representative director and president, and his experience as an independent director
gained at other companie s after leaving Sumitomo Corporation.

Independent Director,
Member of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee

Takayo Hasegawa(Born on Oct. 15, 1959)

Apr. 1984
Jun. 2005

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetingsNew

0 shares—

JoinedHOYASHOWAELECTRIC REPORTWIRE AND
CABLE
LTD. (present
SWCC
SHOWA HOLDINGS CO., LTD.)©2021 HOYAGROUP
INTEGRATED
2022
42CO.,Copyright
Deputy Director of Technical Development Center and Manager of Superconducting Project of
SHOWA ELECTRIC WIRE AND CABLE CO., LTD.

INTEGRATED REPORT 2022

Independent Director,
Member of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee

Takayo Hasegawa(Born on Oct. 15, 1959)

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetingsNew

0 shares—

Apr. 1984

Joined SHOWA ELECTRIC WIRE AND CABLE CO., LTD. (present SWCC SHOWA HOLDINGS CO., LTD.)

Jun. 2005

Deputy Director of Technical Development Center and Manager of Superconducting Project ofApr. 2006

Director, Director of Technical Development Center of SWCC SHOWA CABLE SYSTEMS CO., LTD.

SHOWA ELECTRIC WIRE AND CABLE CO., LTD.
Apr. 2010

Managing Director of SWCC SHOWA CABLE SYSTEMS CO., LTD., and Corporate Officer, General
Manager of the Technology Planning Office of SHOWA ELECTRIC WIRE AN D CABLE CO., LTD.

Jun. 2013

Director, General Manager of the Technology Planning Office of SHOWA ELECTRIC WIRE AND
CABLE CO., LTD.

Apr. 2017

Director of SWCC SHOWA HOLDINGS CO., LTD.

Jun. 2018

President and Director of SWCC SHOWA HOLDINGS CO., LTD.

Apr. 2019

President and Representative Director, Group CEO of SWCC SHOWA HOLDINGS CO., LTD.

Apr. 2020

President and Representative Director, Chairman of the Board of Director, Group CEO of SWCC

Jun. 2022

Director of the Company (present post)

SHOWA HOLDINGS CO., LTD. (present post)

Important Positions of Other Companies Concurrently Held
President and Representative Director, Chairman of the Board of Director, Group CEO of SWCC SHOWAHOLDINGS CO., LTD.

Reason for the Selection for Director
Ms. Hasegawa was engaged for many years as a researcher in the R&D divisions of the SWCC Group, which was
originally established in the electric wire and cable industry and expanded widely into the Energy /Infrastructure, Communications/Industrial Devices, and Electrical Equipment/Components businesses,
promoting the technological development of the SWCC Group. Since taking office as the first female President
and Representative Director from the R&D divisions in the SWCC G roup in 2018, she has implemented rapid
reform of governance by dividing the business of SWCC SHOWA HOLDINGS CO., LTD. into segments, helping toensure stable profitability. The Company’s Nomination Committee expects that she will contribute significantly
to the Company’s management based on her experience as a manager backed by expertise as an engineer andwith regard to initiatives for new business and transformation.

Independent Director,
Member of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee,
Member of the Healthcare Compliance Committee

Mika Nishimura(Born on Aug. 14, 1963)

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetingsNew

0 shares—Jun. 1985

Joined BAIN & COMPANY

Aug. 1989

INTEGRATED REPORT 2022
JoinedHOYALEK PARTNERSHIP

Jan. 1992

Director, Global Marketing of GUIDANT CORPORATION

Sep. 1999

Managing Partner of THE BLG GROUP

43

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Independent Director,
Member of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee,
Member of the Healthcare Compliance Committee

Mika Nishimura(Born on Aug. 14, 1963)

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetingsNew

0 shares—Jun. 1985

Joined BAIN & COMPANY

Aug. 1989

Joined LEK PARTNERSHIP

Jan. 1992

Director, Global Marketing of GUIDANT CORPORATION

Sep. 1999

Managing Partner of THE BLG GROUP

Oct. 2002

Vice President International Sales, Operations and Marketing of EV3

Jan. 2007

Managing Partner of THE BLG GROUP

Jan. 2011

Operational Partner of GILDE HEALTHCARE PARTNERS (present post)

Apr. 2011

Vice President, Commercial Development of AUXOGYN (present PROGYNY)

Nov. 2015

Vice Presi dent, Commercialization of NVISION MEDICAL CORPORATION (present BOSTON

Jun. 2022

Director of the Company (present post)

SCIENTIFIC)

Important Positions of Other Companies Concurrently Held
Operational Partner of GILDE HEALTHCARE PARTNERS

Reason for the Selection for Director
Ms. Nishimura has over 30 years of experience in the medical technology sector and was engaged incommercialization strategy on a global scale (50 markets in North America, Europe, the Asia-Pacific region, andCentral and South America). Through leadership positions, including Director, Global Marketing, she has been
involved in clinical and business strategies and has a proven track record in helping to launch franchises that
contribute to stable revenue growth. In addition, her experience as a partner in a life science venture fund has
given her a broad global perspective on the latest technologies and companies. Based on her past experience,
the Company believes that she will contribute to strengthening the supervisory function, primarily in the life
science business, and at the same time provide a great deal of advice on business strategy of the Company.

Director, Representative Executive Officer, President & CEO
Chairperson of the Board of Directors

Eiichiro Ikeda(Born on Mar. 17, 1970)

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetingsNew

1,400 shares—

Apr. 1992

Joined the Company

Sep. 2010

Co-CEO, Memory Disk Division of the Company

Sep. 2010

Head of Optical Lens of the Company

Jun. 2013

Executive Officer & Chief Operating Officer (COO) of the Company

Jun. 2015

Executive Officer & Chief Operating Officer (COO), Information Technology and Chief Technology
Officer (CTO) of the Company

Mar. 2020

Executive Officer & Information Technology and Chief Technology Officer (CTO) of the Company

Mar. 2022

Representative Executive Officer President & CEO,and Chief Representative of Si ngapore Branch of
HOYA INTEGRATED REPORT 2022
44 Copyright ©2021 HOYA GROUP
the Company (present post)

Jun. 2022

Director of the Company (present post)INTEGRATED REPORT 2022

Director, Representative Executive Officer, President & CEO
Chairperson of the Board of Directors

Eiichiro Ikeda(Born on Mar. 17, 1970)

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetingsNew

1,400 shares—

Apr. 1992

Joined the Company

Sep. 2010

Co-CEO, Memory Disk Division of the Company

Sep. 2010

Head of Optical Lens of the Company

Jun. 2013

Executive Officer & Chief Operating Officer (COO) of the Company

Jun. 2015

Executive Officer & Chief Operating Officer (COO), Information Technology and Chief Technology

Mar. 2020

Executive Officer & Information Technology and Chief Technology Officer (CTO) of the Company

Mar. 2022

Representative Executive Officer President & CEO, and Chief Representative of Si ngapore Branch ofJun. 2022

Director of the Company (present post)

Officer (CTO) of the Company

the Company (present post)

Important Positions of Other Companies Concurrently Held
None

Reason for the Selection for Director
Mr. Ikeda has played an important role in management as Executive Officer & Chief Operating Officer for the
Information Technology business and Chief Technology Officer for the entire HOYA Group prior to taking officeas Representative Executive Officer, President & CEO in March this year. Since March, he has led the Group as
CEO and gives appropriate explanations and reports on strategies based on portfolio management at meetingsof the Board of Directors. He also supervises the execution of operations by other Executive Officers and strives
to enhance the corporate value of the Group. The Company’s Nomination Committee believes that he willcontribute to important management matters while fulfilling his accountability to the Board of Directors as a
Director of the Company, taking into consideration his past performance as an Executive Officer, so it has
nominated him as a new candidate for Director.

Director, Representative Executive Officer & CFO

Ryo Hirooka(Born on Jan. 14, 1974)

Apr. 1996

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetings

New

8,000 shares—

Joined The Sumitomo Trust and Banking Company, Limited (present Sumitomo Mitsui Trust Bank,
Limited)

Sep. 2002

Joined the Company

Aug. 2004

Financial Manager of HOYA HOLDINGS N.V. (Netherlands)

Feb. 2007

Director of HOYA HOLDINGS N.V.

Jul. 2007

Director of HOYA HOLDINGS N.V., and President of HOYA HOLDINGS (Asia) B.V.

Jul. 2009

Deputy CFO of Netherlands Branch of the Company

Jun. 2013

Executive Officer & CFO of the Company

Jun. 2014

Representative Executive Officer & CFO (present post)

Jun. 2022

Director of the Company (present post)
HOYA INTEGRATED REPORT 2022

45

Copyright ©2021 HOYA GROUP

Important Positions of Other Companies Concurrently HeldNone

INTEGRATED REPORT 2022

Director, Representative Executive Officer & CFO

Ryo Hirooka(Born on Jan. 14, 1974)

Apr. 1996

Number of years in office of the
Director of the Company

Number of shares of
the Company held

Number of attendances
to the Board meetings

New

8,000 shares—

Joined The Sumitomo Trust and Banking Company, Limited (present Sumitomo Mitsui Trust Bank,
Limited)

Sep. 2002

Joined the Company

Aug. 2004

Financial Manager of HOYA HOLDINGS N.V. (Netherlands)

Feb. 2007

Director of HOYA HOLDINGS N.V.

Jul. 2007

Director of HOYA HOLDINGS N.V., and President of HOYA HOLDINGS (Asia) B.V.

Jul. 2009

Deputy CFO of Netherlands Branch of the Company

Jun. 2013

Executive Officer & CFO of the Company

Jun. 2014

Representative Executive Officer & CFO (present post)

Jun. 2022

Director of the Company (present post)

Important Positions of Other Companies Concurrently Held
None

Reason for the Selection for Director
Mr. Hirooka has been leading the Group’s financial strategy as Representative Executive Officer & CFO,
implementing proactive and flexible measures with a focus on capital efficiency. For several years, the focus on
cash generation, including its efforts to promote cash conversion cycle (CCC) improvements, has been highly
regarded by investor s. In addition, he has been explaining and reporting financial matters, including financial
results, appropriately at meetings of the Board of Directors and results briefing sessions, and has been fulfilling
his role as an Executive Officer. The Company’s Nomination Committee believes that he will contribute toimportant management matters while fulfilling his accountability to the Board of Directors as a Director of theCompany, taking into consideration his past performance as an Executive Officer, so it has nominated him as a
new candidate for Director.

Basic Views

Basic View

Board of Directors

Independent Directors’
Skills Matrix

Independent Directors’
Skills Matrix

HOYA Group
Compliance Organization

Board of Directors
Executive Officers
Board Member Profiles
Committees

Copyright ©2022 HOYA GROUPHOYA INTEGRATED REPORT 2022

46

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Independent Directors’ Skills Matrix

Corporate
Management

GlobalBusiness

●

●

●

●

●

●

●

●

Mitsudo
Urano
Shuzo
Kaihori
Hiroaki
Yoshihara
YasuyukiAbe
TakayoHasegawa
Mika

Finance/
Accounting

IT/
Technology

Board of Directors

Basic View

Medical

●

●

●

●

●

●

●

●

●

●

●

Nishimura

Developmentof HumanResources/
Diversity

M&A

●

●

●

Independent Directors’
Skills Matrix

Independent Directors’
Skills Matrix

Executive Officers

HOYA Group
Compliance Organization

Board of Directors
Executive Officers
Board Member Profiles
Committees

Copyright ©2022 HOYA GROUPHOYA INTEGRATED REPORT 2022

47●

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Executive Officers
Executive Officers
Executive Officers
Executive Officers
At HOYA, swift execution of operations is conducted by entrusting the authority of the Board of Directors to
At HOYA, swift execution of operations is conducted by entrusting the authority of the Board of Directors to
At HOYA, swift
executionof operations
bywithentrusting
the authorityof theBoardofMarchDirectors
executive
officers
within theframeworkisofconducted“a company
Nomination
Committee,
etc.”
Since
1, to
At HOYA, swift
executionof operations
bywithentrusting
the authorityof theBoardofMarchDirectors
executive
officers
within theframeworkisofconducted“a company
Nomination
Committee,
etc.”
Since
1, to
executive
officers
withintheframeworkof “afollowing
companythewithNominationetc.”persons—namely,
Since March 1,
2022,
a new
structurehas
beenestablishedchangeof CEO.Committee,
Currently, four
executive
officers
withintheframeworkof“acompany
withNomination
Committee,
etc.”
Since
March
1,
2022, a new structure has been established following the change of CEO. Currently, four persons—namely,
2022,
a new
structure
has beenestablishedfollowingthe(CFO),changeof CEO.
Currently,
four persons—namely,
the
Chief
Executive
Officer(CEO),
Chief Financial
Officer
Chief
Business
Development
Officer (CBDO)
2022,
a new
structure
has beenestablishedfollowingthe(CFO),changeof CEO.
Currently,
four persons—namely,
the
Chief
Executive
Officer(CEO),
Chief Financial
Officer
Chief
Business
Development
Officer (CBDO)
the
Officer(CEO),
Officer(CFO),
Chief(CSO)—haveBusiness Development
OfficerandChief
ChiefExecutive
Legal Officer(CLO),
andChief
ChiefFinancial
Sustainability(ESG)
Officerbeen nominatedby(CBDO)thethe
Officer(CEO),
Officer(CFO),
Chief(CSO)—haveBusiness Development
OfficerandChief
ChiefExecutive
Legal Officer(CLO),
andChief
ChiefFinancial
Sustainability(ESG)
Officerbeen nominatedby(CBDO)theand Chief Legal
Officer (CLO),
and Chief(ESG)and
Officer(CSO)—havebeenby theNomination
Committee
as candidates
forSustainability
executive officers
electedat the Board
ofnominatedDirectors’ meetings.
and
Chief
Legal
Officer(CLO),
andChief
Sustainability(ESG)
Officer(CSO)—have
beennominatedbytheNomination Committee as candidates for executive officers and elected at the Board of Directors’ meetings.
Nominationas candidates
executiveinofficers
and elected
at the Boardof Directors’
meetings.
Eachof themCommittee
oversees theexecution offor
operations
their respective
jurisdictions
determinedby theBoard
Nomination
Committee
ascandidates
for
executive
officers
andelected
at
the
Board
of
Directors’
meetings.
Each of them oversees the execution of operations in their respective jurisdictions determined by the Board
Eachof themand
overseesof operationsin theirfashion.
respective
determinedby thethe head
Boardof
Directors,
carriesthe
outexecution
decision-making
in a speedy
Thejurisdictions
executive officers
instructEachof themand
overseesof operationsin theirfashion.
respective
determinedby thethe head
Boardof
Directors,
carriesthe
outexecution
decision-making
in a speedy
Thejurisdictions
executive officers
instructof
Directors,
andandcarriesout decision-making
in a speedy
The executive
instruct
the head
officedivisionsthe respective
persons responsible
forfashion.
the businessdivisionsofficers
to formulate
andof
Directors,
andcarriesout
decision-making
inaspeedyfashion.
The
executive
officers
instructthehead
office divisions and the respective persons responsible for the business divisions to formulate andoffice divisions
andmeasures
the respective
persons
responsible forpolicy
the businessdivisionsformulateandimplement
specific
basedon the management
determinedby theto
Boardof Directors.
With
office divisions
andmeasures
the respective
persons
responsible forpolicy
the businessdivisionsformulateandimplement
specific
basedon the management
determinedby theto
Boardof Directors.
With
implement
specificmeasures
based
on
the
management
policydetermined
by
the
Board
of
Directors.
respect to all business divisions, Budgetary Business Division Meetings are held every quarter in each With
implement
specificmeasuresbased
on the management
policyMeetings
determinedby theBoardof Directors.
respect
to allbusiness
divisions,
BudgetaryBusiness Division
are held
every
quarterin each With
respect todivision,
all business
Budgetaryareheld every
quarterrelativein eachto thebusiness
with divisions,the attendanceof allBusinessexecutiveDivision
officers,Meetings
where thestatusof progress
respect todivision,
all business
Budgetaryareheld every
quarterrelativein eachto thebusiness
with divisions,the attendanceof allBusinessexecutiveDivision
officers,Meetings
where thestatusof progressbusiness
division,with theof areall executive
officers,
wherethe statusof Authority
progress relative
to theannual planis checked
andattendance
deliberations
held on plans
for thecomingquarter.
over day-tobusinessdivision,withtheattendanceofall
executive
officers,
wherethestatusofprogressrelativeto theannual plan is checked and deliberations are held on plans for the coming quarter. Authority over day-toannual
plan isoperations
checked anddeliberations
held ondelegatedplans for tothethecomingquarter.
Authority
over day-today
business
in eachbusinessare
is largely
respective
persons
responsible
for theannualplan isoperations
checked anddeliberations
held ondelegatedplans for tothethecomingquarter.
Authority
over day-today
business
in eachbusinessare
is largely
respective
persons
responsible
for theday business
operations
in each thebusinessis largely atdelegatedto the respective
persons
responsible
for thebusiness
divisions,who execute
plan approved
the Budgetary
Meeting. Allfour executive
officers
day business
operations
in each thebusinessis largely atdelegatedto the respective
persons
responsible
for thebusiness
divisions,who execute
plan approved
the Budgetary
Meeting. Allfour executive
officers
business
divisions,who
executetheapproved at the Budgetary Meeting. All four executive officers
attendeachmeetingof theBoard
ofplanDirectors.
business
divisions,who
executetheplanapprovedattheBudgetary
Meeting.
Allfourexecutive
officers
attend each meeting of the Board of Directors.
attend each meeting of the Board of Directors.
attend each meeting of the Board of Directors.
Representative Executive Officer
Representative Executive Officer
President& CEOExecutive Officer
Representative
Representative
President& CEOExecutive Officer
President & CEO
President & CEO

Eiichiro
Ikeda
Eiichiro
Ikeda
Eiichiro
Eiichiro Ikeda
Ikeda

Representative Executive Officer & CFO
Representative Executive Officer & CFO
Representative Executive Officer & CFO
Representative Executive Officer & CFO

Ryo
HirookaRyo
HirookaRyo
Ryo Hirooka
Hirooka

Executive Officer, Chief Business Development Officer (CBDO) and
Executive Officer, Chief Business Development Officer (CBDO) and
Chief
Legal
OfficerChief(CLO)
Executive
Officer,Business Development Officer (CBDO) and
Executive
Officer,Business Development Officer (CBDO) and
Chief
Legal
OfficerChief(CLO)
Chief Legal Officer (CLO)
Chief Legal Officer (CLO)

Augustine
Yee
Augustine
Yee
Augustine
Augustine Yee
Yee

Executive Officer
Executive Officer
Chief
Sustainability(ESG) Officer (CSO)
Executive
Officer
Executive
Officer
Chief
Sustainability(ESG) Officer (CSO)
Chief Sustainability (ESG) Officer (CSO)
Chief Sustainability (ESG) Officer (CSO)

TomokoNakagawa
TomokoNakagawa
TomokoTomoko Nakagawa
Nakagawa

HOYA INTEGRATED REPORT 2022

48

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Committees

As internal organizations of the Board of Directors, we have the Nomination Committee, Compensation
Committee, and Audit Committee; each of which is composed exclusively of independent directors.

Nomination Committee
The Nomination Committee fairly and rigorously selects candidates for directors, ensuring said candidates
possess knowledge, expertise, and capabilities suited to HOYA’s business environment, based on the“Standard for Election of Candidates for Director,” and proposes the candidates to the General Meeting of
Shareholders for voting. The Committee also fairly and rigorously selects candidates for executive officers
and the representative executive officer, based on the “Standard for Election of Candidates for Executive
Officer,” and proposes the candidates to the Board of Directors for voting. In cases that meet the criteria fordismissal, the Committee makes decisions to propose the dismissal of directors to the General Meeting of
Shareholders and the dismissal of executive officers to the Board of Directors for voting.
The Committee has set out independence criteria for director candidates that are stricter than the rules of
the Tokyo Stock Exchange to ensure the effective functioning of independent directors’ overseeing executive
officers.
The outline of the Standard for Election of Candidates for Director is as follows:[For both internal and independent director candidates]
Those with appropriate personalities and insights as director
Those with no health problems in performing their duties[For internal director candidates]
Those with a high level of knowledge and ample experience in our business
Excellent business decision-making ability and business execution ability[For independent director candidates]
Those with extensive experience as business managers
Or those who are in positions as professionals in law, accounting, finance or similar fields
Those who are able to participate in at least 75% of the HOYA Group’s Board meetings
Those who have no significant interests in the HOYA Group and are able to maintain their
independence

Independence criteria for independent director candidates
To ensure the independence of candidates for independent directors, candidates must not fall under any of
the categories below.
<Those who are related to the HOYA Group>
Those who previously worked for the HOYA Group
Those who have a family member (spouse, child or relatives by blood or by affinity within the second
degree) who have held the position of director, executive officer, corporate auditor or management
employee of the HOYA Group in the past five years<Major shareholder> HOYA INTEGRATED REPORT 2022

49

Copyright ©2021 HOYA GROUP

Those who are major shareholders (10% or more) of the HOYA Group, or those who are directors,
executive officers, corporate auditors or employees of companies that are major shareholders of theThose who previously worked for the HOYA Group
Those who have a family member (spouse, child or relatives by blood or by affinity within the second
degree) who have held the position of director, executive officer, corporate auditor or management
employee of the HOYA Group in the past
five yearsREPORT 2022
INTEGRATED<Major shareholder>
Those who are major shareholders (10% or more) of the HOYA Group, or those who are directors,
executive officers, corporate auditors or employees of companies that are major shareholders of the
HOYA Group or those who have a family member who holds a top management position at suchcompanies
Those who execute operations of a company of which a major shareholder is the HOYA Group<Those who are related to major business partners>
Those who are operating directors, executive officers or employees of any important business partner,
either for the HOYA Group or the corporate groups which the candidates come from, the sales to whichbusiness partner comprises 2% or more of the consolidated net sales of the HOYA Group or thecompany groups for either of the past three years, or those who have a family member who is a top
management of such business partner<Those who provide professional services (lawyers, certified public accountants, certified tax
accountants, patent attorneys, judicial scriveners, etc.)>
Those who have received remuneration of 5 million yen or more per year or those who have a family
member who has received remuneration of 5 million yen or more per year, from the HOYA Group in thepast three years
When the organization that the candidate belongs to, such as a company and association, has received
cash, etc. from the HOYA Group, the amount of which exceeds 100 million yen per year or 2% ofconsolidated net sales of the said organization, whichever is higher<Donation, etc.>
When the association or organization which the candidate belongs to as director or operating officer
has received donations or grants in the past three years, the amount of which exceeds 10 million yen
per year or 30% of the said organization’s average annual total costs, whichever is higher, or when theassociation or organization which the candidate’s family member belongs to has received donations or
grants equivalent to the aforementioned amount<Others>
When directors are exchanged
When the candidate has any other important interest in the HOYA GroupThe Nomination Committee held 12 meetings during fiscal 2021, in which the attendance ratio of all
members was 100%. At these meetings, the Committee spent a great deal of time discussing, including withoutside experts, the important issue of CEO succession.

Compensation Committee
The objective of the Compensation Committee is to establish a remuneration system that incentivizes
directors and executive officers and to contribute to improved financial performance for HOYA by
undertaking appropriate evaluations of their performance. The Compensation Committee decides on a
remuneration package for each director and executive officer in accordance with the following policies:
The Compensation Committee held 11 meetings during fiscal 2021, in which the attendance ratio of all
members was 100%. During these meetings, the Committee held in-depth deliberations, particularly on
remuneration under the new executive structure.
Policy concerning remuneration for Directors
The remuneration of Directors consists of a fixed salary and a medium- and long-term incentive (stock
options). The fixed salaries consist of a basic compensation and compensation for being a member or achairperson of the Nomination, Compensation, or Audit Committee. The compensation levels are set
appropriately by taking into consideration such factors as the Company’s business environment and thelevels set by other companies
as determineda survey
byHOYAan outside
professional
Copyright ©2021
GROUP
HOYA INTEGRATEDREPORTby2022
50 conductedorganization.

Policy concerning remuneration for Directors
The remuneration of Directors consists of a fixed salary and a medium- and long-term incentive (stock
options). The fixed salaries consist of a basic compensation and compensation for being a member or achairperson of the Nomination, Compensation, or Audit Committee. The compensation levels are set

INTEGRATED REPORT 2022

appropriately by taking into consideration such factors as the Company’s business environment and thelevels set by other companies as determined by a survey conducted by an outside professionalorganization.
Furthermore, fixed numbers of stock options are granted to newly appointed and reappointed officers inorder that they may hold a common viewpoint with shareholders regarding the share price and shareinterests with shareholders on a medium- to long-term basis. Stock options become exercisable af ter a
waiting period of approximately one year, in increments of 25% of the granted number of stock options ineach subsequent year. Stock options are exercisable for a period of 10 years.

[Composition ratio of compensation for directors]
Fixed salary: Medium- and long-term incentive (stock options) = Approximately 1:0.3–0.6
Note: The ratio of the above medium- and long-term incentive shall fluctuate with changes in the
Company’s share price and other factors.

From fiscal 2022, Restricted Stock Unit (hereinafter referred to as “RSU”) will be introduced in place of stock
options. Every year, the basic deliverable number of shares equivalent to fixed remuneration for
independent directors will be announced for the target period of three years from the relevant year. Afterthe end of the target period, the basic compensation amount equivalent to the market value of theCompany’s shares based on the basic deliverable number of shares will be determined. HOYA will grant
independent directors a claim for monetary remuneration accounting for 50% of the basic compensation
amount. Independent directors will contribute such monetary remuneration claim in kind and receive anallotment of shares, the number of which will be equal to the amount of such monetary remuneration claim
divided by the paid-in amount for the Company’s shares. In view of securing funds for tax payment, theamount corresponding to the residual basic compensation amount will be paid in cash. HOYA plans to issue
RSU for the target period of three fiscal years from fiscal 2023 and subsequent fiscal years as well.

[Future composition ratio of remuneration]
Fixed salary: Medium- and long-term incentive (RSU) = Approximately 1:1
Note: A rough guide assuming that the share price in three years’ time is about the same as the shareprice when the RSU was granted.

Policy concerning remuneration for Executive Officers
The remuneration of Executive Officers consists of a fixed salary, an annual incentive (performance-based
bonuses), and a medium- and long-term incentive (Performance Share Unit) . For fixed salaries, basic
compensation is set appropriately according to the office and responsibility of each Executive Officer(Representative Executive Officer, CFO, etc.) and by taking into consideration such factors as theCompany’s business environment and the levels set by other companies as determined by a survey
conducted by an outside professional organization. Other than basic compensatio n described above,
benefits granted to expatriates (such as housing) are also set at appropriate levels in consideration of theCompany’s business environment and the levels set by other companies as determined by a survey
conducted by an outside professional organization.
The annual incentive is determined according to quantitative results and qualitative evaluations and varies
within the range roughly from 0% to 200%. As indicators of quantitative results, net sales, profit attributableto owners of the Company, and basic earnings per share (EPS) stated in the Consolidated Financial
Statements of the Company have been adopted.
As a medium- and long-term incentive, the Company introduced the Performance Share Unit.
HOYA INTEGRATED REPORT 2022

51

Copyright ©2021 HOYA GROUP[Composition ratio of Executive Officers’ remuneration]

CEO’s fixed salary: Annual incentive (performance-based bonus): Medium- and long-term incentive

to owners of the Company, and basic earnings per share (EPS) stated in the Consolidated Financial
Statements of the Company h ave been adopted.
As a medium- and long-term incentive, theCompany introduced
the Performance Share Unit.
INTEGRATEDREPORT 2022

[Composition ratio of Executive Officers’ remuneration]
CEO’s fixed salary: Annual incentive (performance-based bonus): Medium- and long-term incentive(PSU) = Approximately 1:1:1.25
Other executive officers’ fixed salary: Annual incentive (performance-based bonus): Medium- and longterm incentive (PSU) = Approximately 1:1:1

Performance Share Unit
The Company has introduced the Performance Share Unit (PSU) in place of the existing stock option plansince fiscal 2019. The PSU is a system for granting shares at a number that is in proportion to the level ofachievement of the predetermined performance conditions. The payment ratio that corresponds to the levelof achievement of the performance targets will range from 0% to 200%, based on performance during threefiscal years. Of note, as indicators of performance during t hree fiscal years, HOYA has selected net sales,earnings per share (EPS) and return on equity (ROE) in the Consolidated Financial Statements, and in fiscal
2022, newly introduced an ESG indicator. The objective of the PSU is to boost the motivation and morale of
HOYA’s executive officers with respect to medium- to long-term business performance and higher corporate
value, and secure highly talented hu man resources by setting a competitive compensation level.
Under this plan, after determining the basic deliverable number of shares according to the position andresponsibilities of each eligible recipient, the Company grants compensation in an amount equivalent to themarket price of the Company’s shares according to the degree of achievement of the medium- to long-term
performance targets shown in the table below.

Basic deliverable

Medium- to long-term

number of shares

performance targets

Position/
responsibilities

Basic deliverable
number of shares

CEO

7,300

CFO

4,200

CBDO and CLO

3,400

CSO

3,200

Indicator

Net
sales
Earnings
Financial per
Indicators share
*1
(EPS)

ROE

ESG
indicator

Target(consolidated)

Reason forthe selection of
the indicator

Selected as an indicator to760 billion measure growth potential of theyen HOYA Group in the domestic andoverseas markets.

560 yenSelected as an indicator tomeasure growth of the Company
from the same perspective asshareholders.

Sel ected as an indicator tomeasure whether the Company
20.00% has generated return on
shareholders’ investment
effectively.

Evaluations byexternalorganizations *2
Status of initiatives
on priority ESG
themesSelected as an indicator tomeasure sustainability
initiatives from the viewpoint of
ESG*1 The targets above are set in consideration of, among others, the Company’s business environment and market
consen sus and do not constitute the Company’s financial forecasts.
*2 Evaluations by three companies, namely, CDP, MSCI and Sustainalytics, will be used.
The above are target figures for the three fiscal years from fiscal 2022 to fiscal 2024.

Total amount of remuneration, etc. of Directors and Executive Officers for the fiscal year under review

Classification

Total amount of remuneration by type
Total amount of
Number of
Performance©2021 HOYAGROUPHOYA INTEGRATED REPORT
2022
remuneration,
52 CopyrightFixed
Stockpayees
based
PSU
etc.
salaryoptionsbonuses

*1 The targets above are set in consideration of, among others, the Company’s business environment and market
consen sus and do not constitute the Company’s financial forecasts.
*2 Evaluations by three companies, namely, CDP, MSCI and Sustainalytics, will be used.
The above are target figures for the three fiscal years from fiscal 2022 to fiscal 2024.

INTEGRATED REPORT 2022

Total amount of remuneration, etc. of Directors and Executive Officers for the fiscal year under review

Number ofpayeesClassification

Total amount of remuneration by type

Total amount of
remuneration,
etc.

Performancebased
bonusesFixedsalaryStockoptions

PSU

Independent

6
persons

125
million yen

51
millionyen－

74
million yen－

Internal

1
person24
million yen

14
millionyen－

10
million yen

－

Total

7
persons

149
million yen

65
millionyen－

84
million yen－

Executive Officers

5
persons

716
million yen

286
millionyen

251
million yen

14
million yen

164million
yen

Total

12
persons865
million yen

351
millionyen

251
million yen

98
million yen

164millionyen

Directors

Notes: 1. At the end of the fiscal year under review, there were six Directors (five Independent Directors and one Internal
Director) and four Executive Officers, which are different from the figures presented in the table above because
Mr. Hiroshi Suzuki—who had been an Executive Officer at the beginning of the fiscal year—retired as an
Executive Officer on March 1, 2022, and one Independent Director who r etired at the conclusion of the 83rd
Ordinary General Meeting of Shareholders is included.
2. Fixed salary for Executive Officers includes oversea Executive Officers’ benefit as expatriate of 108 million yen.
3. Total amount of remuneration, etc. includes the amounts paid to one Executive Officer who assumed office on
March 1, 2022.
4. For stock options, the fair value of stock acquisition rights was c alculated and amounts to be recorded as
expenses for the fiscal year under review are shown in the table above. For Executive Officers, no stock options
were newly granted in the fiscal year under review due to the introduction of PSU in place of stock options fromfiscal 2019. The table above shows stock options granted in past fiscal years in amounts to be recorded as
expenses for the fiscal year un der review.
5. For PSU, the table above shows amounts to be recorded as expenses for the fiscal year under review.

Amount of consolidated remuneration for each Director
Chief Executive Officer (CEO)Executiveclassification

Total
amountFixedsalaryPerformancebased
bonusesStockoptions

PSU

Representative Executive Officer
President & CEO(Previously Executive Officer,
Chief Technology Officer (CTO))

Representative
Executive
Officer160
millionyen

69
millionyen

65
million yen

3millionyen

24
millionyen

Hiroshi Suzuki

Director

24
millionyen

14
millionyen－

10
millionyen－

Representative
Executive
Officer249
millionyen

95
millionyen

60
vmillion yen

6millionyen

89
millionyen

NameEiichiro Ikeda

Chairperson of the Board of Directors(Previously Representative
Executive Officer,
President & CEO)

Notes: 1. Mr. Eiichiro Ikeda was in office as Representative Executive Officer (CEO) from March 1, 2022 to March 31, 2022.
2. Mr. Hiroshi Suzuki was in office as Representative Executive Officer (CEO) from April 1, 2021 to February 28,
2022.

Executive Officers (whose consolidated remuneration, etc. totaled 100 million yen or more during theconsolidated fiscal year)
HOYA INTEGRATED REPORT 2022
Name

Executiveclassification

53

Total
amountCopyright ©2021 HOYA GROUP

FixedsalaryPerformancebased bonuses

Stockoptions

PSU

Officer

yen

yen

yen

yen

Notes: 1. Mr. Eiichiro Ikeda was in office as Representative Executive Officer (CEO) from March 1, 2022 to March 31, 2022.
2. Mr. Hiroshi Suzuki was in office as Representative Executive Officer (CEO) from April 1, 2021 to February 28,
2022.

INTEGRATED REPORT 2022

Executive Officers (whose consolidated remuneration, etc. totaled 100 million yen or more during theconsolidated fiscal year)
Name

Ryo Hirooka
Representative Executive
Officer & CFO

Executiveclassification

Total
amountFixedsalaryRepresentative
Executive Officer

150
million yen

63
million yen

Executive
Officer136
million yen

57
million yen

Performancebased bonuses

Stockoptions

PSU

57
million yen

2million yen

28
million yen

52
million yen

3million yen

24million yen

Augustine Yee
Executive Officer,
Chief Business
Development Officer (CBDO)
and Chief Legal Officer (CLO)

Audit Committee
The Audit Committee formulates the audit policies and audit plans for each fiscal year and verifies financial
statements, etc., based on the quarterly reports, year-end reports, and timely reports received from theaccounting auditor according to such policies and plans. It also interviews the Audit Department and theInternal Control Department to obtain the results of operational audits, and verifies the soundness, legality,
efficiency, etc., of management. All important matters are reported to the Board of Directors, andcountermeasures are taken as necessary.
Audit Committee meetings were convened nine times in fiscal 2021, in which the attendance ratio of all
members was 100%.
The Committee discussed mainly the following agenda items:
Agreement on the accounting auditor of the HOYA Group and its remuneration
Resolution on the audit report of the Audit Committee
Review reporting from the accounting auditor (five times in total per year)
Quarterly reporting from the Audit Department and the Help Line
Deliberations during the fiscal year under review also focused on reports from the accounting auditor, theAudit Department, and the Internal Control Department, while providing advice and suggestions to the
executive team with regard to any issues that came to light.

Executive Officers

Basic View

Committees

Independent Directors’
Skills Matrix

HOYA Group
Compliance Organization

HOYA Group
Compliance Organization

Board of Directors
Executive Officers
Board Member Profiles
Committees

Copyright ©2022 HOYA GROUPHOYA INTEGRATED REPORT 2022

54

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

HOYA Group Compliance Organization

The HOYA Group has established the Headquarters Compliance Group under the HOYA Group Chief
Compliance Officer (CCO), and appointed a Compliance Officer in each business division. In addition, theHeadquarters Compliance Group operates a hotline for receiving whistleblowing complaints (HOYA HelpLine). However, the Audit Committee is directly in charge of whistleblow ing complaints related to Executive
Officers and the CCO, who constitute the upper organization of the Compliance Group, and the Audit
Committee Office serves as the point of contact for receiving such complaints. The content of andresponses to whistleblowing complaints made to the HOYA Help Line are reported by the CCO to the Audit
Committee on a regular basis. Of note, any unfair treatment of whist leblowers and persons seeking advice(including any retaliatory measures such as dismissal, salary reduction, personnel transfer andharassment) is prohibited.

Establishment of an employee whistleblowing and consultation system
As part of our internal control systems, the HOYA Group established the HOYA Help Line in 2003 as awhistleblowing and consultation system for the Group. This is a framework that protects whistleblowers
when there have been violations of laws, regulations, or the HOYA Code of Conduct so that problems can be
known at an early stage and smoothly communicated to top management in an aim to ensure thesoundness of the entire Group through quick and appropriate responses to such issues. Information onwhistleblowing complaints is also reported to the Audit Committee on a quarterly basis.
We are creating an environment in which advice can be sought easily, including establishing an external
point of contact for consultation in each coun try, accepting whistleblowing complaints and consultation
requests 24 hours a day on the Web in multiple languages, making consultation available in the local
language, and allowing anonymity of whistleblowers. Having established rules on the operation of the
HOYA Help Line in compliance with laws and regulations, we protect whistleblowers by prohibiting any actsthat constitute the unfair treatment o f whistleblowers and respond to whistleblowing complaints by giving
consideration to the confidentiality of information to ensure their anonymity.
In fiscal 2021, there were 180 whistleblowing complaints made to the HOYA Help Line, of which 48% wererelated to the workplace environment and 30% were related to HOYA’s system.
In fiscal 2021, there were no whistleblowing incidents inflicting a serious impact on HOYA’s businesses.
Number of Whistleblowing Incidents (Global)
FY2017FY2018FY2019FY2020

FY2021

111

105

146

135

180

0.35%

0.49%

Number ofwhistleblowing
incidents
Percentage of

HOYA INTEGRATED REPORT 2022

0.30%

55

0.27%

Copyright ©2021 HOYA GROUP

0.38%

In fiscal 2021, there were 180 whistleblowing complaints made to the HOYA Help Line, of which 48% wererelated to the workplace environment and 30% were related to HOYA’s system.
In fiscal 2021, there were no whistleblowing incidents inflicting a serious impact on HOYA’s businesses.

INTEGRATED REPORT 2022

Number of Whistleblowing Incidents (Global)
FY2017FY2018FY2019FY2020

FY2021

111

105

146

135

180

0.30%

0.27%

0.38%

0.35%

0.49%

Number ofwhistleblowing
incidents
Percentage of
employees ＊* Ratio of whistleblowers to the total number of employees in the country where the whistleblowing and consultation
system has been introduced

For our business partners outside the HOYA Group, we have established a pointof contact for making inquiries and reports in respect of the HOYA Supplier Codeof Conduct. We also investigate and respond to incidents in an appropriatemanner in consideration of the protection of the informer and the confidentialityof information.
Point of contact for inquiries and reports related to the HOYA Supplier Code of
Conduct:
supplierconduct@hoya.com

HOYA Code of Conduct
HOYA believes that if each and every employee acts fairly with high ethical standards in good faith, not tomention complying with laws and regulations, it will translate into “stakeholders’ trust.” Based on such aview, in 1997 we established the HOYA Code of Conduct, which clearly defines the standards of conduct foreach and every employee. We have since repeatedly revised the Code while reflecting the enactment of newlaws and regulations and the amendment and abolition of existing ones, as well as changes in society. Also,
we check the behavioral guidelines in workplace activities and utilize the Code to raise employees’
awareness as our b asic policy for compliance.
Having translated the Code into 27 languages in consideration of the circumstances of HOYA, which
operates businesses on a global scale, we are making the Code thoroughly known within the Group by suchmeans as making employees do a read through in the group to which they belong once a year andconducting online education and verification tests. In fiscal 2021, the particip ation rate in online educationand verification tests targeted at all employees in the HOYA Group was 98%.

Prevention of Harassment
We have established the HOYA Group Policies and Guidelines for Measures to Prevent Harassment, which
set forth measures and guidelines to prevent harassment, protect the dignity of employees as an individual
and prevent workplace disorder and any obstacles to work. Based on the Guidelines as well as laws andregulations in each country, we conduct education and training on har assment prevention measures

©2021
HOYA
GROUP training on managerHOYAINTEGRATEDREPORT
2022
56 Copyrighttargeting all employeesof theHOYA Group.
Formanagers
in Japan,weconductoriented harassment prevention measures. In fiscal 2021, the participation rate in online training andverification tests in Japan (rank-and-file employees and managers) was 97%.

INTEGRATED REPORT 2022

Prevention of Harassment
We have established the HOYA Group Policies and Guidelines for Measures to Prevent Harassment, which
set forth measures and guidelines to prevent harassment, protect the dignity of employees as an individual
and prevent workplace disorder and any obstacles to work. Based on the Guidelines as well as laws andregulations in each country, we conduct education and training on harassment prevention measu res
targeting all employees of the HOYA Group. For managers in Japan, we conduct training on manageroriented harassment prevention measures. In fiscal 2021, the participation rate in online training andverification tests in Japan (rank-and-file employees and managers) was 97%.
Furthermore, we conduct initiatives to instill and ingrain compliance on an ongoing basis, such as posting
information via t he intranet and on bulletin boards, etc., and creating awareness-raising pamphlets andposters. From time to time, we post self-check tests (Q&A) on noncompliance incidents that are likely tooccur in familiar situations as well as contents for understanding the essence of compliance through inhouse case studies via the intranet and on bulletin boards, etc., so that employees can check complianceag ain when given the opportunity to do so and thereby gain a higher level of awareness.

Committees

Basic View

HOYA Group
Compliance Organization

Independent Directors’
Skills Matrix

HOYA Group
Compliance Organization

Board of Directors
Executive Officers
Board Member Profiles
Committees

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57

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Environmental
HOYA Group Environmental Philosophy andFundamental Environmental Policies
HOYA is engaged in environmental protection activities as part of its ESG promotion efforts, in order toprotect the global environment to be inherited by the next generation.
The HOYA Group established its “Environmental Philosophy” and “Fundamental Environmental Policies” in
1993, and has since been promoting environmental protection activities targeting all of its businessfacilities inside and out side Japan.
In 2012, the environmental and occupational safety and health management systems of the individual
facilities were reviewed thoroughly in the process of obtaining a global multisite certification for thosesystems. Since then, the Group has been operating all of its environmental protection and occupationalsafety and health activities in a globally integrated manner.
In 2022, we updated th e “Environmental Philosophy” and “Fundamental Environmental Policies” toproactively address issues surrounding the global environment.

HOYA Group Environmental Philosophy

The HOYA Group pushes forward with its corporate activities focusing on sustainability topreserve the global environment for future generations.

Fundamental Environmental Policies

1. We carry on our corporate activities in harmony between people, society, and nature by recognizing theimportance of environmental protection in all our operations.
2. We keep reducing environmental burdens in our corporate activities of product development,
manufacture, and sale by complying with the applicable environmental laws and regulations of eachcountry and locality.
3. We set up our structures and targets and carry out our measures and policies systematically inadvancing our global environmental protection activities.
4. We pursue our activities designed for prevention of global warming and creation of recycling society bytraining our consciousness and responsibility on the preservation of the environment.

HOYA Group Environmental Protection and Occupational Safety and HealthOrganization

In October 2008, the Group’s environmental protection organization and the occupational safety and healthorganization were merged with each other. Since then, with the new structure supervised by the HOYA
Group Director for Environmental Protection, Occupational Safety and Health, the Group has been carryingout smooth and efficient activities of environmental protection and occupational safety and health.
HOYA INTEGRATED REPORT 2022

58

Copyright ©2021 HOYA GROUPHOYA Group Environmental Protection and Occupational Safety and Health Organization

advancing our global environmental protection activities.
4. We pursue our activities designed for prevention of global warming and creation of recycling society bytraining our consciousness and responsibility on the preservation of the environment.

INTEGRATED REPORT 2022

HOYA Group Environmental Protection and Occupational Safety and HealthOrganization

In October 2008, the Group’s environmental protection organization and the occupational safety and healthorganization were merged with each other. Since then, with the new structure supervised by the HOYA
Group Director for Environmental Protection, Occupational Safety and Health, the Group has been carryingout smooth and efficient activities of environmental protection and occupational safety and health.
HOYA Group Environmental Protection and Occupational Safety and Health Organization

Structuring of a global management system for its environmental and occupationalsafety and health management system

The HOYA Group has been building a global management system based on International Organization forStandardization (ISO) 14001 and 45001 for the purpose of promoting environmental protection activities
by employees and ensuring the safety and health of employees. In February 2013, the HOYA Group acquired
global multisite certification. As of March 31, 2022, 49 sites in 18 countries were certified. Certification has
been acquired at 100% of our major production/research and development bases, and certification is also
being obtained for newly organized bases one by one.
Go to the current status of ISO qualification

HOYA Group Environmental
Philosophy and Fundamental
Environmental Policies

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Copyright ©2021 HOYA GROUP

Climate ChangeINTEGRATED REPORT 2022

Environmental
Climate Change

Greenhouse Gas
HOYA Strategy for CO2 Reduction
The HOYA Group is globally conducting its environmental protection activities, in which attempts are being
made to reduce CO 2 emissions by paying special attention to its "energy consumption."

CO2 Reduction Targets
In order to accelerate initiatives to reduce greenhouse gas (CO 2) emissions, we have started conducting
studies and holding discussions internally on the medium- and long-term targets and roadmaps for the
HOYA Group. For fiscal 2022, we are implementing measures tentatively targeted at reducing annual
emissions by 1% (compared to fiscal 2019 level) until our medium- and long-term targets are set.

CO2 Emissions
In fiscal 2021, HOYA’s CO 2 emissions (Scope 1 and 2 emissions) amounted to 425,902 tons, up 4.9% year on
year and up 1.8% compared to its fiscal 2019 level. On the other hand, CO 2 emissions per unit of net sales
are on a downtrend. We will continue to accelerate our initiatives so that we can successfully reduce not
only CO 2 emissions per unit of net sales but also total CO 2 emissions.
t-CO 2e

Unit

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Scope 1emissionst-CO 2

27,374

23,34621,48921,466

22,37920,73816,374

15,997

Scope 2emissionst-CO 2

373,437

394,12 1

376,627

387,869

383,391

397,728

389,802409,905

Total

t-CO 2400,811

417,467

398,116

409,335

405,770

418,466

406,176425,902

CO 2
emissions
per unit of
net salest-CO 2perbillion
yen

818

826

831

764

717

726

741

644

Note that the CO 2 emissions are calculated, for each of the production bases *1, from the electric power andfuel consumptions as determined by the summation formulas standardized for the whole HOYA Group.
*1 Some of non-production bases are included

HOYA INTEGRATED REPORT 2022

60

Copyright ©2021 HOYA GROUP

net sales

yenNote that the CO 2 emissions are calculated, for each of the production bases *1, from the electric power andfuel consumptions as determined by the summation formulas standardized for the whole HOYA Group.
*1 Some of non-production bases are includedINTEGRATED REPORT 2022

Response to the TCFD

In November 2021, HOYA declared its support for the recommendations by the Task Force on Climaterelated Financial Disclosures (TCFD) and joined the TCFD Consortium. Currently, we are working on the taskof disclosing information related to climate change in accordance with the TCFD recommendations.

Energy saving and power saving activities

At production bases, we are replacing facilities with energy-saving types (such as adopting ice thermal
storage systems and high-efficiency transformers), conducting energy-saving activities (such as optimizing
the operating hours of boilers and air-conditioning equipment) and promoting roof-greening, etc. We arealso endeavoring to suppress CO 2 emissions from non-production bases by such means as introducing
casual wear, adjusting the indoo r temperature appropriately and implementing efficient lighting in offices.
Examples of energy and power saving initiatives
Use of the Joint Crediting Mechanism (JCM)
In 2016, we introduced a heat recovery heat pump at the eyeglass lens plant in Vietnam. It is used to saveenergy and reduce CO 2 emissions by using the heat that used to be expelled to the outside air when coldheat was supplied as a source of cold heat for the production process and as an auxiliary heat source forheating the water used in the manufacturing process. Before introducing the heat recovery heat pump,
we used only electric heaters to obtain the desired temperature.

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61

Copyright ©2021 HOYA GROUP

storage systems and high-efficiency transformers), conducting energy-saving activities (such as optimizing
the operating hours of boilers and air-conditioning equipment) and promoting roof-greening, etc. We arealso endeavoring to suppress CO 2 emissions from non-production bases by such means as introducing
casual wear, adjusting the indoor temperature appropriately and implementing efficient lighting in offices.

INTEGRATED REPORT 2022

Examples of energy and power saving initiatives
Use of the Joint Crediting Mechanism (JCM)
In 2016, we introduced a heat recovery heat pump at the eyeglass lens plant in Vietnam. It is used to saveenergy and reduce CO 2 emissions by using the heat that used to be expelled to the outside air when coldheat was supplied as a source of cold heat for the production process and as an auxiliary heat source forheating the water used in the manufacturing process. Before introducing the heat recovery heat pump,
we used only electric heaters to obtain the desired temperature.

At the eyeglass lens plant in Vietnam, one of the existing centrifugal chillers was replaced with a highly
efficient inverter centrifugal chiller. By using the new chiller for regular operation and the old one as
backup equipment, we achieved a lower introduction cost, improved energy efficiency, and reduced CO 2
emissions at the same time.
Introduction of renewable energy
Some of our business establishments engaged in the eyeglass lensbusiness—namely, HOYA Vision Care ATC Ramsey in the UnitedStates and HOYA LENS DEUTSCHLAND GMBH in Europe—are
running on 100% renewable energy. We will continue to promote theintroduction of renewable energy on a Group-wide scale.

HOYA Group Environmental
Philosophy and Fundamental
Environmental Policies

Climate Change

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Copyright ©2021 HOYA GROUP

Water

INTEGRATED REPORT 2022

Environmental
Water

Initiatives to effectively utilize water resources

The HOYA Group endeavors to effectively utilize water resources by reusing water and reducing water
usage on a global scale, in accordance with its Fundamental Environmental Policies.

Water usage reduction targets

The HOYA Group has set numerical targets in each of its business segments and manages its progress inachieving the targets.

Water usage

In fiscal 2021, water usage in the HOYA Group was 18,639,000 cubic meters. While both water usage andwater usage per unit of net sales both increased from the previous fiscal year due to the recovery from theimpact of COVID-19, water usage per unit of net sales decreased from pre-COVID-19 levels. As we havebeen promoting initiatives to reuse water in recent years, our water reuse ratio has been on an u ptrend in
the past couple of years. We will continue to make effective use of water resources.
Water usage in the HOYA Group (1,000 cubic meters)
Unit

FY2014 FY2015 FY2016

FY2017FY2018FY2019FY2020

FY2021Japan

Thousandcubic meters

1,185

1,183

1,098

1,008

1,071

929

886

866

Overseas

Thousandcubic meters

16,16916,336

15,871

16,36016,357

16,84814,158

17,773

Total

Thousandcubic meters

17,354

17,51916,96917,36817,42917,777

15,044

18,639Water usage
per unit of
net sales

Thousandcubic meters
per billion yen

35.4

34.6

35.4

32.4

30.8

30.8

27.5

28.2

Water reuse
ratio

%

15%

16%

18%

20%

21%

27%

30%

30%

Water usage was calculated targeting production bases, based on the usage of city water, industrial waterand groundwater identified by using the data aggregation format shared universally within the HOYA
Group.
Water usage

Water reuse ratio

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Copyright ©2021 HOYA GROUP

ratioWater usage was calculated targeting production bases, based on the usage of city water, industrial waterand groundwater identified by using the data aggregation format shared universally within the HOYA
Group.

INTEGRATED REPORT 2022

Water usage

Water reuse ratio

Initiatives to reuse water

Initiatives to effectively utilize water resources are being carried out in each business segment. In thephotomask manufacturing process, cleaning is performed by using ultrapure water to remove various
chemicals and foreign matter. The used water undergoes a process at an effluent treatment facility to berendered harmless, some of which is subsequently collected and reused. The ultrapure water recycling
facility, which consists of adsorbents and reverse osmosis (RO) membranes, makes it possible to reusewater by removing impurities.
Recycling of ultrapure water in photomask manufacturing process

Climate Change

Water

Pollution Control Measures
and Waste, ets.

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Environmental
Pollution Control Measures and Waste, etc.

Soil pollution control measures, underground water pollution control measures, andhazardous substance leak control measures

In March 2010, the Group issued the HOYA Group Standard for Environmental Facilities designed to help theGroup to prevent any hazardous impact on the environment inside and outside HOYA Group facilities.

Waste reduction and reuse initiatives

In entrusting contracted disposal of factory
waste, individual facilities select contractors
after carefully checking their business licenses.
Also, through consignment contracts withappropriate disposal contractors, the Group
promotes the recycling of industrial waste,creation of monetary values out of waste, andreduction of waste emissions.
In order to realize a sustainable, recycling-

Collection of paper cartons to be recycled into roofing materials

oriented society, we are recycling wood waste
and waste plastics, promoting the reuse of

packaging materials, and recycling paper, among others. Our major factories in Japan have achieved zero
emissions in terms of industrial waste. Also, our factories outside Japan are holding in-house competitions
regarding ideas for recycling waste plastics, using recycled paper of beverage packaging to repair roofs
damaged by disasters in cooperation with local volu nteer groups and thereby contributing to society andengaging in other initiatives in the form of in-house recycling activities, in addition to turning polluted sludge
into valuable substances and reusing photomask cases, among others.

Waste emissions in the HOYA Group (t)FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021Totalemissions

2,656

3,462

3,362

3,478

3,144

2,099

2,229

2,295

Recycling
rate

79.0%

60.1%

66.1%

62.6%

65.9%

76.0%

91.0%

90.5%

Total
emissions

43,992

43,76049,88856,35456,76656,28954,28164,163

Recycling
rate

61.0%

66.5%

66.3%

68.4%

69.1%

76.2%

72.0%

69.9%

Total
emissions

46,64847,22253,25059,832

59,911

58,38856,50966,458

72.8%

70.6%

Japan

Overseas

GlobalRecyclingrate

HOYA INTEGRATED REPORT 2022

62.0%

66.1%

65

66.3%

Copyright ©2021 HOYA GROUP

68.1%

68.9%

76.2%

regarding ideas for recycling waste plastics, using recycled paper of beverag e packaging to repair roofs
damaged by disasters in cooperation with local volunteer groups and thereby contributing to society andengaging in other initiatives in the form of in-house recycling activities, in addition to turning polluted sludge
into valuable substances and reusing photomask cases, among others.

INTEGRATED REPORT 2022
Waste emissions in the HOYA Group (t)FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021Totalemissions

2,656

3,462

3,362

3,478

3,144

2,099

2,229

2,295

Recycling
rate

79.0%

60.1%

66.1%

62.6%

65.9%

76.0%

91.0%

90.5%

Total
emissions

43,992

43,76049,88856,35456,76656,28954,28164,163

Recycling
rate

61.0%

66.5%

66.3%

68.4%

69.1%

76.2%

72.0%

69.9%

Total
emissions

46,64847,22253,25059,832

59,911

58,38856,50966,458Recycling
rate

62.0%

66.1%

66.3%

68.1%

68.9%

76.2%

72.8%

70.6%

Japan

Overseas

GlobalChemical substances

Based on the HOYA Group Chemical Substances Management Standard, the HOYA Group as a wholecomplies with laws and regulations in accordance with the Standard with respect to chemical substancesused in business activities, takes countermeasures against their leakage and manages such substances byutilizing Safety Data Sheets (SDSs).

Animal experimentation

There are some cases in which animal experiments need to be conducted to develop some medical
products. The HOYA Group has established regulations in each business in consideration of various laws
and regulations as well as guidelines established by relevant organizations, and conducts internal screening
from the viewpoint of the 3Rs principle on animal experimentation, i.e., Replacement (utilization ofalternat ive methods of experimentation that do not involve the use of animals), Reduction (reduction of thenumber of animals used) and Refinement (alleviation of pain and suffering caused to animals).

Water

Pollution Control Measures
and Waste, etc.

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

SocialHuman Capital

Labor Management
Labor Management

Basic approach
The HOYA Code of Conduct stipulates the basic guidelines to be complied with when performing operations
based on the Corporate Mission and values of the HOYA Group. The Code of Conduct clarifies that basic
human rights are to be respected and that all forms of discrimination and harassment in connection torace, nationality, gender, religion, belief, birthplace, age, or disabilities are to be eliminated in all corporate
activities. We aim to create a safe and healthy workplace that allows employees to feel secure while theywork. The Company will provide equipment, systems, and working conditions so that each and every
employee respects and cooperates with each other as the Company strives to create a workplace that iseasy to work in.
HOYA Code of Conduct
The HOYA Code of Conduct is guidelines for all officers and employees of the HOYA Group to execute
operations in the right way in accordance with the philosophy and values set out in its Corporate Mission
and Management Principles. Having translated the HOYA Code of Conduct into 27 languages inconsideration of the circumstances of the Company, which operates businesses on a global scale, we aremaking the Code thoroughly known within the Group b y such means as making employees do a readthrough in the group to which they belong once a year and conducting online education and verification
tests. In fiscal 2021, the participation rate in online training and verification tests targeted at all employees
in the Group was 98%.
For information on human rights, please also refer to the Compliance page.

Modern Slavery Statement

In accordance with the UK Modern Slavery Act 2015 legislation, the HOYA Group publishes a statement on
the steps it has taken to identify and eradicate slavery and human trafficking within its business and supply
chains.
Modern Slavery Statement (1,435KB)

Labor Management

Human Capital
Labor Management

Product Safety andQuality

INTEGRATED REPORT 2022
Strategy for HumanHOYAResource
Development

67

Strategy for Human
Resource Development

Supply Chain
Management

Copyright ©2021 HOYA GROUP

Corporate
CitizenshipINTEGRATED REPORT 2022

SocialHuman Capital

Strategy for Human Resource Development
Diversity

Utilizing global human resources
The HOYA Group promotes sales and production at optimal locations on a global scale in diverse
businesses. In this context, the diversity of human resources in the Company is our strength as well as ourdriving force for sustained value creation. HOYA believes that by respecting and accepting diversity andproactively taking advantage of the “differences,” we can flexibly adapt to the ever-changing businessenvironment and meet diversifying customers’ needs, and thereby bring about higher corporate value.
HOYA has long been recruiting personnel based on their individual capabilities, regardless of theirnationality, gender, etc. Over 90% of our employees work in locations outside Japan. By proactively
promoting talent ed local employees to top management positions and giving them more opportunities, wehave been pursuing the globalization of the Group as a whole, resulting in the percentage of non-Japanesenationals in top management positions at overseas subsidiaries exceeding 90%. Going forward, HOYA willcontinue to provide equal opportunities to many competent personnel.
As of the end of June 2022, at HOYA Corp oration, we have promoted a non-Japanese to the position of
executive officer, and non-Japanese nationals account for more than 60% of presidents of key businessdivisions running businesses globally.

“Minkatsu” Diversity ProjectIn 2014, we launched the “Minkatsu” diversity project for the purpose of creating a work environment inwhich each and every employee can feel a sense of fulfillment from work and play an active role by fully
demonstrating his/her ability. As part of the “Minkatsu” diversity project, we are working to increase theproportion of female employees and female leaders *.
* Female leaders: Subsectional chief equivalent to or above section and highly skilled professionals

HOYA INTEGRATED REPORT 2022

Proportion of Female Employees and of Female
Leaders

68

Copyright ©2021 HOYA GROUP

Proportion of Female Employees and Proportionof Female Leaders in Japandemonstrating his/her ability. As part of the “Minkatsu” diversity project, we are working to increase theproportion of female employees and female leaders *.
* Female leaders: Subsectional chief equivalent to or above section and highly skilled professionals

INTEGRATED REPORT 2022
Proportion of Female Employees and of Female

Proportion of Female Employees and Proportion

Leadersof Female Leaders in Japan

Proportion of
FemaleEmployees

FY2019FY2020

FY2021

Japan

25.9%

28.0%

29.6%

Overseas

57.4%

55.7%

–*

Group‐wide

53.4%

53.0%

–*

Proportion of
Female Leaders

FY2019FY2020

FY2021

Japan

10.8%

12.7%

14.3%

Overseas

27.5%

43.3%

–*

Group‐wide

20.2%

34.5%

–*

* Since fiscal 2020, we have been conducting a survey on
the proportion of women overseas and on a Groupwide scale, together with the employee engagement
survey. In fiscal 2021, no em ployee engagement survey
was conducted; thus, no data was collected. The next
survey is slated to be conducted in the fall of 2022.

We do not discriminate based on gender in hiring, promotions, or pay increases, and instead focus on
actively employing human resources with highly specialized capabilities and morals. In addition, at HOYA
Corporation, two of its directors are women (25.0%), and three of its officers including executive officers are
women (30%).
We are promoting “Minkatsu” activities by setting our target at making female leaders and female
employees in Japan account for at least 15% and 30%, respectively, by April 2023.The proportion of women
is steadily increasing, and going forward, we will continue to engage in initiatives from the viewpoint ofexpanding the recruitment and occupational fields of women and improving the workplaceenvironment/culture, as well as holding career advancement seminars and cross-div isional exchange
meetings targeted at female employees, among others.
Business divisions are making efforts to develop the necessary environment, systems and culture
tailored to their respective businesses.
Those related to childcare/nursing care support

Those related to workstyle in generalChildcare/nursing care support system

Flextime system(leave of absence, shortened working hours)

Shortened working hours, reduced number ofStaggered working hours

working days

Leave to provide care for children

Challenge leave*

Encouraging male employees to take

Second job

childcare leave, etc.

Work from home
Encouraging employees to proactively takeannual leave by setting recommended days
for taking annual leave, etc.

* HOYA Corporation has established the challenge leave system for employees that have worked for a set number ofconsecutive years. A challenge leave of 20 days each is granted when the number of consecutive years worked by
employees that work five days a week reached 10 years, 20 years, and 30 years.

By developing an environment in which diverse personnel can play an active role by demonstrating theircapabilities and systems
that enable workstyles with higher
productivity
efficiency, we will strive to
Copyright©2021 HOYAand
GROUP
HOYA INTEGRATED REPORT 2022

69

strike a balance between realizing the sense of fulfillment from work as well as personal life and enhancing
corporate value.

* HOYA Corporation has established the challenge leave system for employees that have worked for a set number ofconsecutive years. A challenge leave of 20 days each is granted when the number of consecutive years worked by
employees that work five days a week reached 10 years, 20 years, and 30 years.

INTEGRATED REPORT 2022

By developing an environment in which diverse personnel can play an active role by demonstrating theircapabilities and systems that enable workstyles with higher productivity and efficiency, we will strive tostrike a balance between realizing the sense of fulfillment from work as well as personal life and enhancing
corporate value.
Utilizing people with disabilities
The HOYA Group actively utilizes people with disabilities, for example in the operation of its Ichikawa
Challenge Office that supports eco projects.
(Proportion of disabled persons employed in Japan: 2.31% as of March 31, 2022)

Employee Engagement Survey

Based on the belief that “people are our great asset,” we are seeking to create a workplace environment inwhich diverse employees can demonstrate their respective abilities, take on new challenges and realize theirpotential.
HOYA periodically conducts an employee engagement survey ta rgeted at all employees in the Group.
Through the survey, we listen to employees’ opinions and utilize them to create a better workplaceenvironment.
After conducting a survey in March 2021 (fiscal 2020), we analyzed the results obtained from the survey
and then implemented a series of measures by focusing mainly on two fields. (The response rate for thesurvey conducted in March 2021 was 96%.)
1. Perfo rmance Management (Performance Evaluation System)
Through the survey, employees called for greater objectivity and transparency in the performance
evaluation system and a higher frequency of talks about career development with their supervisor. In
response, we have revamped the HOYA Group’s framework of performance management (performance
evaluation system) and started implementing it afresh in fiscal 2022.
Gist of new performance management:
・ Determine clearly-defined figures that are expected for performance targets and actions
・ Conduct evaluation in a fair and objective manner
・ Give periodic and effective feedback for human resource development
・ Pay-for-performance
2. Career Development
Employees also demanded more learning and skill development than before. In response, we plan to launch,
on a trial basis, an online learning platform for upskilling employees and assisting them in acquiring
qualifications in fiscal 2022.
Gist of career development program (online learning platform):
・ Re-train employees who support HOYA’s growth strategy
・ Spur employees to engage in life-long learning
・ Upskill employees by providing on-demand learning content
Going forward, we will continue to listen to emp loyees’ opinions through employee engagement surveys on
an ongoing basis and develop an environment in which each and every employee can grow together withHOYA with a sense of fulfillment from work. (The next employee engagement survey is scheduled to be
conducted in the fall of 2022.)

Enhancement anddevelopment of human resources
Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2022
70

anongoingbasis
antoenvironment
in which opinions
each andthroughevery employee
cangrow together
withonGoingforward,weand
willdevelop
continue
listen to employees’
employeeengagement
surveys
HOYA
with abasis
senseandof fulfillment
work. (Thenext employee
surveyscheduled
to be
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every employee
canisgrowtogetherwithconducted
the fallofoffulfillment
2022.) from work. (The next employee engagement survey is scheduled to be
HOYA with ina senseconducted in the fall of 2022.)

INTEGRATED REPORT 2022

Enhancement and development of human resources
Enhancement and development of human resources
Basic approachAtthe approach
HOYA Group, we provide a work environment that respects individuality and diversity and promotes
Basic
the
growthindividuals
while giving
to thesafety andhealth ofand
employees.
At theHOYAofGroup,
we provide
a workconsideration
environment that
respects
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and promotes

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we provide
the innovativevalue
the growthof individuals
consideration
to the safety
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each and every employee works to improve the knowledge and skills and we provide the innovative value
sought by society.
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People differ
in termsof things such as values, how they live, personality, and individual capabilities. There
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For thisorganizational
People differ in terms ofsuch
as values,
howwaysthey oflive,
personality,
andreason,
individual
capabilities. Theremanagement
invarietythe current
era needs
to provide
frameworks
that leveragetheindividualityof employees
are also a wideof stances
towardjobs andways of working.
For thisreason,organizational
and
allow
employees
toincrease
theircapabilities
inenvironments
that
match
in
dividual
aptitudes.
The new
management in the current era needs to provide frameworks that leverage the individuality of employees
ideal
employeeenvironment
sought
by
HOYA
is
one
in
which
all
employees
canfully
exploittheircapabilities
and allow employees to increase their capabilities in environments that match individual aptitudes. The newandthe organization
businessthroughfriendlycompetition.
idealcontribute
employee toenvironment
soughtandby HOYA
is onein whichall employees
can fully exploit their capabilities

and contribute to the organization and business through friendly competition.
In response to the wide variety of capacity development needs of employees and in order to learn thethe HOYAGroup individuallyspecializedskillsofrequired
the industry,needs
deploysthetheIn responseknowledge
to the wideandvarietycapacityfor
developmentof employees
and in orderto learn
employeeeducational
programs
that
are
most
suitableforeachbusiness
divisionandregion.
specialized knowledge and skills required for the industry, the HOYA Group individua lly deploys theemployee educational programs that are most suitable for each business division and region.
For example, for the Eye Care Company’s human resource development and HOYA Electronics Singapore’s
participationin theIndustry Citizenship
Coalition(EICC) Codeandof Conduct
seminar, pleaserefer toFor example, fortheElectronic
Eye Care Company’s
human resource
development
HOYA Electronics
Singapore’s
our website. in the Electronic Industry Citizenship Coalition (EICC) Code of Conduct seminar, please refer toparticipation
our website.
HOYA Prize
The
HOYA
Prize is an award system that has been established for all employees with the aim of recognizing
HOYA
Prize
and
rewardingdaily
hardsystem
work andof employees
in fororder
communicate
a spirit
The HOYA
Prizethe
is an
award
thatefforts
has beenestablished
all toemployeeswith theaim ofof gratitude
recognizing

towards
employees
thathard
alwaysdoand
theirefforts
utmosta difficult
business
environment.
systemand rewarding
the daily
workofamidemployees
in orderto communicate
a The
spiritaward
of gratitude
does
notstipulateanydetailed
standards,
butwinnersareratherdecided
on
by
the
CEO
based
on
towards employees that always do their utmost amid a difficult business environment. The award systemrecommendations
receivedfromthe managers
of each arebusinesshumandoes
not stipulate any
detailed
standards,
but winners
ratherand
decidedon resourcesby the CEOrepresentatives.
based onrecommendations received from the managers of each business and human resources representatives.

Development and Active Participation of Technical Personnel “Engineers' Report Competition Program”
Development
andTechnical Personnel “Engineers' Report Competition Program”
For
the purposeof Active
furtherParticipation
boosting the oftechnologicalcapabilitiesof theGroup
as a thewhole,
we convene an
For the purpose
ofHOYAfurtherboosting
technological“Engineers’
ReportCompetition
Program”
once
a year asana
capabilities of the HOYA Group as a whole, we convene
place
toannounce
achievements
intechnologicaldevelopment“Engineers’ Report Competition Program” once a year
as a

and
in businessdivisions. An award
isplaceimprovement
to announcemade
achievements
in technologicaldevelopment
presented
fortechnicalreports
anduniquetechnologies
thatand improvement made in business divisions. An award isaredeemedtobeparticularly
outstandingbyexecutive
officerspresented for technica l reports and unique technologies that
whoserve astojudges.
As the respective
staff
are deemedbe particularly
outstanding
bymembers
executiveinofficers
chargeoftechnology
inbusiness
divisionscongregate
at thewho serve as judges. As the respective staff members inevent,
it
also
serves
as
a
place
for
them
to
interactwithcharge of technology in business divisions congregate at thetechnical
personnelof otherdivisions.
event,
it alsoserves asa placefor them to interact withtechnical personnel ofHOYA
otherINTEGRATED
divisions. REPORT 2022

71

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

SocialHuman CapitalOccupational Safety and Health
HOYA Group’s Occupational safety and health activities

The HOYA Group is pushing for the creation of a pleasant workplace environment where every one of theemployees can work in good health and safely. For the HOYA Group’s philosophy, basic policies andorganizational structure related to occupational safety and health, please refer to HOYA’s website.

Status of Occupational Accidents

The HOYA Group engages in day-to-day safety and health activities aimed at preventing serious
occupational accidents from occurring. We are striving to reduce the risks of occupational accidents
occurring by sharing information within the Group and conducting in-house training, internal audits, etc., inaddition to assessing risks based on the HOYA Group Risk Management Guidelines for Occupational Safety
and Health and engaging in various initiatives for managing chemical substances and assuring the safetyof machines and equipment.

Scope

FY2019FY2020

FY2021

Japan

9

9

11

Overseas

167

181

208

Group-wide

176

190

219

Lost time injury (LTI) frequency rate *

Japan

0.35

0.37

0.38

Lost time injury (LTI) intensity rate *

Japan

0.001

0.008

0.003

Number of occupational accidents* Reference data: Lost time injury (LTI) frequency rate: 1.31, and Lost time injury (LTI) intensity rate: 0.06 in the
manufacturing industry according to the Ministry of Health, Labour and Welfare’s fiscal 2021 data

Reduction of risks using risk assessment

All hazardous factors are constantly being checked by risk assessment in accordance with the HOYA Group
Risk Management Guidelines for Occupational Safety and Health. As well, effective safety measures arebeing taken in order of priority for risk reduction.

Strengthening of chemical substances management

Based on the HOYA Group’s common index HOYA Group Chemical Substances Management Standard, we
HOYA INTEGRATED REPORT 2022

72

Copyright ©2021 HOYA GROUP

are managing chemical substances used in our business activities and working to prevent occupational
accidents and diseases caused by chemical substances.

All hazardous factors are constantly being checked by risk assessment in accordance with the HOYA Group
Risk Management Guidelines for Occupational Safety and Health. As well, effective safety measures arebeing taken in order of priority for risk reduction.

INTEGRATED REPORT 2022

Strengthening of chemical substances management

Based on the HOYA Group’s common index HOYA Group Chemical Substances Management Standard, weare managing chemical substances used in our business activities and working to prevent occupational
accidents and diseases caused by chemical substances.

Assurance of Safety of machines and equipment

The safety of machines and equipment is a matter of greater importance in achieving occupational safety.
Various measures for the safety of machines and equipment (reduction of risks) are being taken from thedesign stage according to the HOYA Group Standard for the Safety of Machines and Equipment to preventmachine-related accidents.

OSH Audit (Occupational safety and health)At all the Group's business facilities inside and outside Japan, theenvironment and occupational safety and health personnel andspecialized staff conduct internal audits periodically. After the audits, theygive necessary advice and guidance to respective sections to improve theirobservance of laws and regulations and performance of occupationalsafety and health.

Training in HOYA Group safety and health

The facility environment and occupational safety and health personnel
conference is held twice a year. The intra-Group consulting program for
guidance and training on management systems and risk assessment isheld several times a year mainly for the overseas production bases. These
are all designed to enhance the performance of the occupational safety
and health activities within the HOYA Group.

Strategy for Human
Resource Development

Human Capital
Labor Management

Occupational Safety and
Health

Product Safety andQuality

Health Management

Supply Chain
Management

Strategy for Human Resource
Development
Occupational Safety and Health
Health Management
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Copyright ©2021 HOYA GROUP

Corporate
CitizenshipINTEGRATED REPORT 2022

SocialHuman Capital

Health Management
HOYA Group’s Health Measures

1. Certification for health and productivity management organizations
2. Countermeasures against infectious diseases
3. Measures to prevent lifestyle diseases and prevent them from increasing in severity
4. Mental health measures
5. Return-to-work support and assistance for work-treatment balance
�. Promotion of women’s health
7. Smoking control
�. Overwork pr evention and improvement of work-life balance
9. Management of health of Japanese expatriates
10. Improving emergency medical care and first aid responses
For the details of each measure, please refer to HOYA’s website.

Certification for health and productivity management organizations

Based on the recognition that “health promotion efforts are business
investments,” we are committed to health management with the supportof the Company and the cooperation of all employees.
Please refer to this link for the CEO's Health Management Declaration andthe seven articles that HOYA Group employees are required to follow. (inJapanese only)
The HOYA Group has been certified for six consecutive years under the
Ministry of Economy, Trade and Industry (METI)’s certification programfor outstanding health and productivity management organizations since
the start of the program in 2017 (as of April 1, 2022 ).

Improvement of Labor Productivity

The HOYA Group aims to improve each and every employee’s well-being, develop a pleasant workplaceenvironment in which he/she can demonstrate his/her capabilities, and implement health measures tailoredto health issues, to ultimately eliminate presenteeism *1 and absenteeism *2. In an internal survey conductedin fiscal 2021, neck problems, stiff shoulders, insomnia and lo wer back pain were identified as health issues
that heavily affect presenteeism, so we are working to rectify these issues as a matter of priority. We arealso striving to reduce absenteeism by working on the preventionof cerebral cardiovascular diseases and
Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2022

74

mental health problems, as well as providing return-to-work support and assisting employees in striking abalance between work and treatment.

The HOYA Group aims to improve each and every employee’s well-being, develop a pleasant workplaceenvironment in which he/she can demonstrate his/her capabilities, and implement health measures tailoredto health issues, to ultimately eliminate presenteeism *1 and absenteeism*2 . In an internal survey conductedin fiscal 2021, neck problems, stiff shoulders, insomnia and lower back pain were identified as health issues

INTEGRATED REPORT 2022

that heavily affect presenteeism, so we are working to rectify these issues as a matter of priority. We arealso striving to reduce absenteeism by working on the prevention of cerebral cardiovascular diseases andmental health problems, as well as providing return-to-work support and assisting employees in striking abalance between work and treatment.
*1 Presenteeism: Deterioration in productivity while being present at work due to health problems*2 Absenteeism: Absence from work due to health problems

Overwork prevention

HOYA has established the HOYA Group Standard for the Prevention of Overwork-related Health Problems,
which is in compliance with industrial safety and health laws and regulations, and has implemented it at all
HOYA Group companies. Workers with long working hours are required to have an interview with anindustrial physician, and a system has been put in place to ensure the person in charge of personnel affairs,
the manager, and the industrial physician work together to slash long workin g hours from the perspectivesof both labor management and health management. In addition, as part of workstyle reform, HOYA is
strengthening efforts to steadily improve the utilization rate of annual paid leave.

Countermeasures against infectious diseases

Since before the COVID-19 pandemic, HOYA had been proactively working on measures to address the risksof emerging infectious diseases, following the formulation of its “Guidelines on Countermeasures Against
New Strains of Influenza and Other Infectious Diseases” based on a scenario of pandemics of new strains
of influenza and other emerging infectious diseases. Under the Guidelines, we have established the HOYA
Group Influenza/Epidemic Risk Management Team, formulated a business continuity plan, and organizedchannels for collecting, conveying a nd sharing information; in addition, we have put in place a framework to
enable the stable supply of products, etc. while minimizing health hazards by giving top priority to ensuring
the safety of employees, their families, relevant parties and others.

Countermeasures against COVID-19

The respective Crisis Management Teams of the head office and each business promptly collect informationand collaborate with each other. In addition, we have summarized such matters as measures to prevent
infections in the HOYA Group in the “HOYA Global Post-COVID-19 Work Handbook,” translated it into 21
languages and distributed it to all employees in the Group, with which we conduct education andawareness-raising activities targeted at all employees through e-learning. We conduct an internal audit on
employees’ st atus of adaptation to and compliance with the provisions in the Handbook in an effort tostringently enforce countermeasures against infections. At viable locations inside and outside Japan, we
also offered workplace vaccinations against COVID-19 (initial and booster vaccinations) to employees, theirfamilies and contractors’ employees who wanted to get vaccinated.

Measures to prevent lifestyle diseases and prevent them from increasing in severity

HOYA is stringently enforcing steps to be taken after medical checkups by industrial physicians and healthnurses and striving to make more employees undergo detailed medical examinations and boost the effectsof medical treatment. As a health program in collaboration with HOYA’s corporate health insurance
association, we are working on implementing specific health checkups and specific health guidance in an
efficient and effective manner. Furthermore, we are taking measures to promote fitness habits to not only
prevent lifestyle diseases but also to alleviate stiff shoulders/lower back pain and improve the quality ofsleep of employees.
HOYA INTEGRATED REPORT 2022

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2022

Social
Product Safety and Quality

Product Safety Assurance Policy and Structure
Product safety assurance policy■Legal compliance
Each company in the HOYA Group complies with the standards required of products in Japan andelsewhere around the world. We also comply with laws, regulations, and other standards related to productquality and safety.
■Collecting and responding to product incident information
Each company in the HOYA Group co llects information from customers and other sources related to
product incidents and/or malfunctions. When necessary, we provide legally mandated reports to regulatory
agencies and appropriate information to customers and others. We enact measures to recall products,
repair products, in addition to taking other actions regarding any product-related issues.
■Ensuring product safety
Each company in the H OYA Group provides, where appropriate, user training, up-to-date user guides anddocuments, product warning labels, and other information for the effective, safe use of our products. We
continue to seek opinions from users of our products and reflect this feedback in future products.
■Training and educational systems to improve product safety and quality
Each company in the HOYA Group strives to impro ve product safety and quality. To accomplish this goal,
we conduct ongoing education and training activities. At the same time, each Group company performs
reviews and updates to product safety and quality management organizations and systems.

Product safety assurance structure

At the HOYA Group, under the supervision of the executive officer in charge, each business division has
product safety assurance functions. For businesses falling under the Life Care segment, which handles
medical products, we have established a division in charge of regulations, quality, and government affairs
across these businesses.

HOYA INTEGRATED REPORT 2022

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Copyright ©2021 HOYA GROUP

Each company in the HOYA Group strives to improve product safety and quality. To accomplish this goal,
we conduct ongoing education and training activities. At the same time, each Group company performs
reviews and updates to product safety and quality management organizations and systems.

INTEGRATED REPORT 2022

Product safety assurance structure

At the HOYA Group, under the supervision of the executive officer in charge, each business division has
product safety assurance functions. For businesses falling under the Life Care segment, which handles
medical products, we have established a division in charge of regulations, quality, and government affairs
across these businesses.

Quality Management System

The HOYA Group has acquired international quality management system ISO9001 (mainly for the
Information Technology business) or ISO13485 (mainly for the Life Care business) focusing on major
production bases in each business and is making efforts to improve the safety and quality of its products.
For information on our acquisition status of ISO certification, please refer to this page.

Health Management

Human Capital
Labor Management

Product Safety andQuality

Product Safety andQuality

Supply Chain
Management

Supply Chain
Management

Strategy for Human Resource
Development
Occupational Safety and Health
Health Management
HOYA INTEGRATED REPORT 2022

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Copyright ©2021 HOYA GROUP

Corporate
CitizenshipINTEGRATED REPORT 2022

SocialSupply Chain Management

Basic Policy

The HOYA Group operates manufacturing facilities on a global scale and sells products to customers
around the world by processing and assembling raw materials and components procured at the facilities ineach country.
In order to boost corporate value in a sustainable manner, it is important to maintain product safety andquality at a high level, comply with laws and regulations and protect human rights not only within the
Company but also throughout its supply chains. For this purpose, it is imperative to manage supply chainsin an appropriate manner. Accordingly, major suppliers are required to sign and comply with the HOYA
Supplier Code of Conduct; additionally, key suppliers are visited and examined periodically, and asnecessary, provided with assistance to make improvements.

Supplier Code of Conduct

The HOYA Group seeks to apply a high level of legal compliance and ethical practices consistent with its
legal and social responsibilities and duty to protect the basic human and worker rights of everyone in theorganization.
We have also established the HOYA Supplier Code of Conduct that applies to all suppliers providing
products and services to us. The Code requires our suppliers to adopt the same level of legal complianceand ethical practices as HOYA, and all our suppliers are asked to accept and comply with it before
conducting business with HOYA.
Going forward, we will continue to work on suppliers so that we can obtain signatures from all of t hem.
(Signaturerate as at time of the fiscal 2020 survey: Approx. 90%)

Supplier Audits

Key suppliers are audited, either periodically or as necessary, in accordance with the quality assurance
system in each business segment.

Responses to Conflict Minerals

With the cooperation of its suppliers, the HOYA Group does not use any minerals sourced from the
Democratic Republic of the Congo or its neighboring countries that are defined as conflict minerals in
Section 1502 of the U.S. Dodd-Frank Act.
We request suppliers to comply with the HOYA Supplier Code of Conduct that sets out the above policy, andkey suppliers to periodically cooperate in our conflict minerals survey * using the Conflict Minerals Reporting
Copyright ©2021
HOYA GROUP
Template (CMRT), which
is aINTEGRATED
template provided
by theResponsible
Minerals
Initiative (RMI). Since fiscal
HOYA
REPORT 2022
78

2020, we have been conducting the conflict minerals survey on a Company-wide scale by expanding its
scope to include the Life Care business as well, not just the Information Technology business.

With the cooperation of its suppliers, the HOYA Group does not use any minerals sourced from the
Democratic Republic of the Congo or its neighboring countries that are defined as conflict minerals in
Section 1502 of the U.S. Dodd-Frank Act.INTEGRATED REPORT 2022
We request suppliers to comply with the HOYA Supplier Code of Conduct that sets out the above policy, andkey suppliers to periodically cooperate in our conflict minerals survey * using the Conflict Minerals Reporting
Template (CMRT), which is a template provided by the Responsible Minerals Initiative (RMI). Since fiscal
2020, we have been conducting the conflict minerals survey on a Company-wide scale by expanding its
scope to include the Life Care business as well, not just the Information Technology business.
We will continue to engage in initiatives with the cooperation of suppliers, including initiatives to identify
smelters so that the procurement source of minerals will be limited to smelters that are compliant with the
Responsible Minerals Assurance Program (RMAP).
* Minerals subject to the survey: tantalum, tin, gold, tungsten

Conflict Minerals Survey Results and Targets

Starting with the conflict minerals survey completed in fiscal 2021, we have set new targets and aremonitoring the survey response rate from suppliers and the number and ratio of smelters compliant with
the RMAP to promote initiatives to reduce the risk of conflict minerals. Specifically, we work with suppliers
to improve the accuracy of the survey and, in the event of non-response to the survey or failure to confirm
RMAP-compliant smelters, we conduct additional surveys and request improvements as necessary.

Fiscal 2021 survey
results

Information
Technology
business

Life Carebusiness

Survey response
collection rate

Total

Target

98.4%

99.6%

99.5%

Identified smelters

69

91

160

Number of RMAPcompliant smelters

55

85

140

Percentage of
RMAP-compliant
smelters

80%

93%

88%

100%

Ongoing
improvement

Note: The survey is conducted after selecting key suppliers subject to the survey according to thecharacteristics of each business.

Product Safety andQuality

Human Capital
Labor Management

Supply Chain
Management

Product Safety andQuality

Corporate CitizenshipSupply Chain
Management

Strategy for Human Resource
Development
Occupational Safety and Health
Health Management

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Copyright ©2021 HOYA GROUP

Corporate
CitizenshipINTEGRATED REPORT 2022

SocialCorporate Citizenship

HOYA’s mission is to contribute to improving the quality of life (QOL) of people around the world through its
own products and services. We are working to contribute to the resolution of social issues regarding eyecare, in which many of our businesses are engaged, from the perspective of supporting “seeing” around theworld.

Contributing to Improving Ophthalmic Medical Access in Developing Countries

Aiming to improve ophthalmic medical access in developing countries and to
avoid illness and ophthalmic diseases by conducting appropriate testing,diagnostics, and treatment, we have formed partnerships with international andlocal organizations to promote literacy in ophthalmic treatment and support
activities in order to educate eye care professionals and improve their skills.
HOYA Vision Care Compa ny (eyeglass lens business) has partnered with Orbis International, a global
nonprofit and nongovernmental organization dedicated to saving eyesight worldwide. Together, HOYA and
Orbis support work in communities to help bridge the vision care gap. Through their network, HOYA has
supported Orbis in mentoring, training, and inspiring local vision care teams in underserved and rural areas,
enabling the fight against preventable blindness in their own communities. Working together to develop the
Cybersight digital education platform, which connects vision professionals to training materials fromacross the world, HOYA and Orbis have a shared vision to prevent avoidable blindness.

Contribution to Ophthalmic Medical Research and Education

The rapid pace of myopia has become a global health issue, and it is said that by 2050
approximately five billion people, roughly half of the world’s population, may beaffected by nearsightedness. *1
HOYA Vision Care Company entered into a partnership with the International Myopia
Institute *2 in March 2022 to promote the prevention, treatment, and management of shortsightedness.
In addition, HOYA Surgical Optics (intraocular lens business) has entered into partnerships with theEuropean School for Advanced Studies in Ophthalmology (ESASO) *3, which supports the education of
ophthalmologists around the world. HOYA Surgical Optics has donated surgical devices (equipment andintraocular lenses) to ESASO’s facilities in Lugano and Lublin and their clinical application specialists
support ESASO’s training teams in wet labs with surgeons.
*1 Source: Holden B. A., et al. Global Prevalence of Myopia and High Myopia and Temporal Trends from 2000 through2050. Ophthalmology. 2016 May; 123(5): 1036–1042*2 International Myopia Institute: A nonprofit organization of experts from around the world, established in 2015,
following the WHO-BHVI meeting amid the growing need to take measures against myopia on a global scale.
*3 ESASO: A nonprofit organization supporting education ai med at improving the expertise and skills of
ophthalmologists around the world.

Click here for the website of HOYA Vision Care Company.
Click here for the website of HOYA Surgical Optics.
HOYA INTEGRATED REPORT 2022

Eye-related donations

80

Copyright ©2021 HOYA GROUP

ophthalmologists around the world.

Click here for the website of HOYA Vision Care Company.
Click here for the website of HOYA Surgical Optics.

INTEGRATED REPORT 2022

Eye-related donations

HOYA Surgical Optics, headquartered in Singapore, has concluded a corporate giving partnership with theSingapore Association of the Visually Handicapped (SAVH), a group that supports people with visualdisabilities, and conducts support activities such as donations to this organization. Donations are used forrehabilitation and after-sales care programs for people with visual disabilities.
Contact Lens Specialty Store: Eyecity Eco Project
The “Eyecity Eco Project” executed by Eyecity—our chain of contact lens
specialty stores—runs a campaign that involves collecting and recycling
empty disposable contact lens cases and donating all proceeds from thesale of the empty cases to recycling contractors. We have been carryingout this industry-first initiative on an ongoing basis since 2011, with theaim of contributing to society in three ways: 1) Protecting the environment
by recycling empty cases into resources, 2) Providing selfreliance/employment support to disabled persons, and 3) Making
donations to the Japan Eye Bank Association.
Japan Eye Bank Association: A nonprofit, public interest corporation
established for the purpose of awareness-raising and promotion of
corneal t ransplants and the eye bank so that people in need of a corneal
transplant can regain their sight.

Volume Collected and Amount Donated to Date

Cumulative volume of
empty cases collected(As of May 2022)

473.10tons
We have collected 473 million
empty cases.

Cumulative CO 2
emissions reduced(As of May 2022)

Cumulative
amount donated(As of February 2022)

1,310.50

10,420,479

We have contributed to the
reduction of CO2 emissions
equivalent to 78.5 times thevolume of the Tokyo Dome.

The entire amount received in
exchange for recycling has been
donated to the Japan Eye Bank
Association.

t-CO2

yen

Humanitarian aid to Ukraine

HOYA Corporation collected donations from employees around the world and delivered them toorganizations to support relief efforts for people affected by the conflict in Ukraine. In addition, theCompany made a donation to the Japanese Red Cross Society and the Japan Committee for UNICEF.
Donations from our employees Total amount: 8,592,481 yen (yen translation)
Donated to: Red Cross Society of each country, organizations supporting the humanitarian crisis in
Ukraine, etc.
Donation from HOYA Corporation Total amount: 100,000,000 yen
Copyright ©2021 HOYA GROUPHOYA
INTEGRATEDREPORT
2022
Donated to: Japanese
Red
Cross Society
50,000,000
81 yenJapan Committee for UNICEF 50,000,000 yenreduction of CO2 emissions
equivalent to 78.5 times thevolume of the Tokyo Dome.

exchange for recycling has been
donated to the Japan Eye Bank
Association.

INTEGRATED REPORT 2022

Humanitarian aid to Ukraine

HOYA Corporation collected donations from employees around the world and delivered them toorganizations to support relief efforts for people affected by the conflict in Ukraine. In addition, theCompany made a donation to the Japanese Red Cross Society and the Japan Committee for UNICEF.
Donations from our employees Total amount: 8,592,481 yen (yen translation)
Donated to: Red Cross Society of each country, organizations supporting the humanitarian crisis in
Ukraine, etc.
Donation from HOYA Corporation Total amount: 100,000,000 yen
Donated to: Japanese Red Cross Society 50,000,000 yen
Japan Committee for UNICEF 50,000,000 yen
In addition, HOYA Surgical Optics donated ophthalmic products (including intraocular lenses andophthalmic viscosurgical devices) through the European Society of Cataract & Refractive Surgeons (ESCRS)
to support surgeons in Ukraine.

Supply Chain
Management

Human Capital
Labor Management

Corporate Citizenship

Product Safety andQuality

Supply Chain
Management

Strategy for Human Resource
Development
Occupational Safety and Health
Health Management

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Copyright ©2021 HOYA GROUP

Corporate
CitizenshipINTEGRATED REPORT 2022

Life Care Business

Health Care
Eyeglass Lenses
Business Overview
HOYA conducts research and development, manufacturing, and sales of
eyeglass lenses.
Our product lineup includes single-vision lenses that possess a single
corrective function for each lens; progressive lenses (varifocal lenses) thatoffer wide visual fields and a seamless transition between near,intermediate, and far distances in a single lens; as well as light-adaptive,
photochromic lenses, which darken to a sun tint outdoors and fade backto clear inside.
In terms of sales by region, Europe is the largest market, followed by theAmericas and the APAC region. Overseas sales account for approximately
90% of total sales.

Supply Chain

Market Conditions
Going forward, demand for eyeglass lenses is expected to continue to increase worldwide, and market
growth in the low single digits is expected over the medium to long term. The reasons for this include theglobal increase in the elderly population, the increase in purchasing power resulting from economic growthin emerging countries, the growing awareness of eye health, and the deterioration of eyesight as people
spend more time using digital devices.
With regard to the impact of the new coronavirus, business is normalizing with the progress of vaccinations
in various countries and the resumption of economic activities.
As for the conflict in Ukraine, we are operating in Eastern Europe (Russia, Ukraine, and Belarus), andcurrently our business in Russia is temporarily limited to healthcare-related activities and within the scopeof international trade restrictions. In fiscal 2021, revenue from sales of eyeglass products in Eastern Europe
accounted for 1% of global revenue.
We provide humanitarian assistance to Ukraine. For more information, please click here.
HOYA INTEGRATED REPORT 2022

83

Copyright ©2021 HOYA GROUPAs for the conflict in Ukraine, we are operating in Eastern Europe (Russia, Ukraine, and Belarus), andcurrently our business in Russia is temporarily limited to healthcare-related activities and within the scopeof international trade restrictions. In fiscal 2021, revenue from sales of eyeglass products in Eastern Europe
accounted for 1% of global revenue.

INTEGRATED REPORT 2022

We provide humanitarian assistance to Ukraine. For more information, please click here.

HOYA Position and Market Share

Sales by Region(FY2021)

The contribution to global growth varies per region. North America,
Europe, and Japan being the mature markets will continue to play asignificant role in the overall market; while faster growth is expectedfrom emerging markets from increased availability of vision protection
products and growing middle-class populations, such as in the Latin
America and Asia-Pacific regions.
HOYA stands at the No . 2 position in the industry, and, in addition toorganic growth, has expanded its share of the market through M&A
initiatives, including the 2013 acquisition of SEIKO’s eyeglass lens unit,

Market Share (FY2021)

and U.S.-based Performance Optics, LLC. in 2017.
HOYA Outlook
Eyeglass lens products account for over 50% of Life Care businesssales, and are a growth driver for Life Care business expansion.
We are strengthening sales activities in Asia, with a focus on China, as
well as in several growth markets in South America to expand ourmarket share.

[HOYA estimate on a value basis]

Additionally, in the United States, we continue to focus on expanding
sales to key accounts and chain stores, on top of the strongly
established presence among independent opticians. With theseopportunities and focus areas, we aim to achieve low-to-mid singledigit percent growth, which is faster than the market. On top of that,
we will also continue to pursue M&A opportunities to boost growth.
On the production side, we are investing globally to meet growing demand and to diversify our production
sites.
The rapid progression of myopia is becoming a global health challenge. An estimated five billion people, orroughly half of the global population, could be affected by shortsightedness by 2050.
Together with the Hong Kong Polytechnic University, HOYA developed “MiYOSMART,” an innovative
spectacle lens for myopia control.
Commercialization of this product started in 2018. MiYOSMART is currently available in several markets,mainly in Asia and Europe, and has been growing rapidly. We plan to gradually obtain approvals and expand
our sales footprint.
Note: As of August 2022, MiYOSMART has not received approval in Japan and the United States.
Number of People with Myopia

HOYA INTEGRATED REPORT 2022

MiYOSMART84

Copyright ©2021 HOYA GROUP

mainly in Asia and Europe, and has been growing rapidly. We plan to gradually obtain approvals and expand
our sales footprint.
Note: As of August 2022, MiYOSMART has
not received
approvalin Japan and the United States.
INTEGRATEDREPORT
2022
Number of People with Myopia

MiYOSMART

Source: Holden, B. A., et al. Global Prevalence of Myopia and High Myopia and Temporal Trends from 2000 through 2050.
Ophthalmology. 2016 May; 123(5): 1036–1042

Contact Lens Retail
Business Overview
In Japan, we are expanding Eyecity outlets, HOYA’s contact lens specialty
retail store chain.
At Eyecity, we offer consulting and sales, making productrecommendations ideally suited to the needs of individual customers, and,leveraging our strength, we provide a wide lineup sourced from major
manufacturers throughout the world.
Stores are established in convenient locations, in close proximity to train
stations, inside shopping centers, and other areas.
Sales Composition Ratio bySales Channel (FY2021)

Market Conditions
The contact lens retail market in Japan temporarily shrank as a result of
the reduction in the frequency of contact lens use, due to the increase inWork From Home (WFH) and homeschooling opportunities, the decreasein opportunities to go out and other such factors attributable to theimpact of COVID-19. While the COVID-19 infection situation has repeatedly
been undergoing a cycle of improvement and deterioration and requires
caution, sales have been robust due to increased store traffic. (If any
restriction on movement, etc., is imposed going forward, it is expected tohave a negative impact.)
As for the market's future outlook, the market is expected to continue
expanding going forward, albeit slightly, due to such factors as theincrease in contract lens demand stemming from the increasing
percenta ge of nearsightedness among the younger generation and therising age of contact lens users in association with the growing prevalenceof multifocal contact lenses, combined with the rise in the average unit
sales price attributable to the increase in sales of high-value-added lenses.

HOYA Market Share atContact Lens Specialty Stores[HOYA estimate on a value basis]

By sales channel, the share of Internet shopping is expected to expand,
while the share of the contact lens specialty store channel is expected to
be steady.

HOYA Position and HOYA
MarketShare
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85

Copyright ©2021 HOYA GROUPHOYA holds the top share in the retail channel for sales made through brick-and-mortar stores.

By sales channel, the share of Internet shopping is expected to expand,
while the share of the contact lens specialty store channel is expected to
be steady.

INTEGRATED REPORT 2022
HOYA Position and Market ShareHOYA holds the top share in the retail channel for sales made through brick-and-mortar stores.
On top of sales growth at existing stores based on, among others, the promotion of high value-added
products, we are working to expand sales by opening new stores, including M&A. We also provide online
sales services in the form of “Hoshii Toki Bin” (meaning on-demand delivery) and “Otoku Teiki Bin” (meanin gmoney-saving regular delivery) to adapt to Internet shopping, which has been expanding in recent years.
These services have been used by many people, especially at the height of the COVID-19 pandemic.
Sales per Customer(Presented as an index with Mar. 2017 as 100)

Number of Eyecity Stores in Japan

HOYA Outlook
Going forward, HOYA will seek to achieve ongoing sales growth at a rate of around 5% through the growthof sales at existing stores by such means as expanding the sales of high-value-added products andstressing the appeal of delivery services that are in high demand in the market, as well as the opening of
new stores, including M&A.
For new stores, HOYA will conduct detailed analyses of an area’s con tact lens-wearing population, market
growth rate, and competitive situation, and will establish stores mainly in city centers, regional cities, andlarge shopping centers. We will also strive to increase efficiency by relocating stores within the same
marketing area as appropriate. In addition, we will work to accelerate growth by actively exploiting M&A
opportunities targeting contact lens specialty stores that have a strong position in their respective local
markets.
In response to heightened market demand for Internet shopping, we will highlight the appeal of delivery
services that enable consumers to place orders periodically or whenever necessary. We will also look into
solutions for Internet shopping channels that are expected to continue growing in terms of share in the
future.

Medical
Medical Endoscopes
Business Overview
HOYA conducts research & development, manufacturing, and sales of
medical flexible endoscopes used in the examination and treatment ofdigestive system, ear, nose & throat (ENT), respiratory organ, etc.

Supply Chain
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medical flexible endoscopes used in the examination and treatment ofdigestive system, ear, nose & throat (ENT), respiratory organ, etc.

INTEGRATED REPORT 2022
Supply Chain

Sales by Region (FY2021)

Sales by Region
By geographical region, sales in Europe and other overseas markets
account for a large portion of total sales.
Market Conditions
Medical expenses are increasing worldwide in line with the aging ofsociety. To keep medical expenses in check, governments in countries
across the globe are promoting the early detection of disease andminimally invasive medical procedures.
Also, endoscopes are attracting a great deal of atten tion due to thedemand for minimally invasive medical treatment, which does not involvethe use of a scalpel on the patient’s body and thus minimizes the physicalburden on the patient.
The growth of the endoscope market is modest in Japan, the UnitedStates, Europe, and other developed countries and regions. However, its
growth rate remains high in Asia—especially China—which is at a stage
where endosco pes are becoming more prevalent. While our forecast
remains unchanged in that the Chinese market is expected to continue
serving as the driving force for the global market in the future, Chinese
government institutions are promoting policies to give priority to Made-inChina products in the bidding process and medical equipment
manufacturers outside China are being required to produce locally in
China.
In fiscal 2021, the market continued to grow due to such factors as therecovery in medical institutions’ willingness to make investments and theincrease in demand after bouncing back from the COVID-19 pandemic.
However, the global shortage of electronic components supply has led to atight supply of endoscopes relative to demand. Although the supply
volume of semiconductors is gradually increasing, t he situation isunstable.

PENTAX Medical ONE Pulmo

In the medium/long term, HOYA expects the endoscope equipment market
to grow at a rate of around 7% on a global scale.

Market Share (FY2021)

HOYA Position and Market ShareHOYA is the second largest group in the industry, with its strengths lying inhigh image quality, ultrasonic endoscopes, small-diameter endoscopesthat strike a balance between image quality, exterior diameter and channel
size, and public health-conscious products.
In terms of geographical region, HOYA will strive to achieve growth by

Copyright ©2021 HOYA GROUP
HOYAinINTEGRATEDREPORT
2022 while
87 securing
enhancing sales activities
Asia and theAmericasstableearnings in Europe, which accounts for about 50% of total sales.

[HOYA estimate on a value basis]

PENTAX Medical ONE Pulmo

In the medium/long term, HOYA expects the endoscope equipment market
to grow at a rate of around 7% on a global scale.

INTEGRATED REPORT 2022
Market Share (FY2021)

HOYA Position and Market ShareHOYA is the second largest group in the industry, with its strengths lying inhigh image quality, ultrasonic endoscopes, small-diameter endoscopesthat strike a balance between image quality, exterior diameter and channel
size, and public health-conscious products.
In terms of geographical region, HOYA will strive to achieve growth byenhancing sales activities in Asia and the Americas while securing stableearnings in Europe, which accounts for about 50% of total sales.

[HOYA estimate on a value basis]

In terms of products, we will pursue product differentiation by further
developing treatment instruments used in combination with endoscopes
as well as disposable endoscopes, while steadily executing initiatives
targeted at products for digestive organs, the main battlefield in theflexible endoscope market.
In the field of disposable endoscopes, HOYA’s first disposable bronchoscope, “PENTAX Medical ONE Pulmo,”
obtained CE mark certification in Europe in May 2021. Moving forward, we will expand sales in Europe andobtain approval in other regions. HOYA’s strength lies in its ability to propose either conventional
endoscopes or disposable endoscopes depending on the purpose and the situation, and in its disposable
endoscopes that have also realized high quality, suction power and operability equivalent to conventional
endoscopes. Although the presence of disposable endoscopes is not yet strong enough to largely replace
conventional endoscopes at this stage, their presence is expected to grow in the medium to long term, so
this is regarded as a stepping stone for us.

Intraocular Lenses
Business Overview
In this field, we perform research and development, manufacturing, and sales of intraocular lenses (IOLs)
for cataract surgeries and ophthalmic medical devices.
With nearly 35 years of experience in designing and producing IOLs, HOYA
Surgical Optics’ mission is to improve the vision and quality of life formillions of people suffering from cataracts.
A cataract is a condition that becomes more common as we age and is thelargest cause of vision loss in people around the world. A cataract istreatable with surgery and it is one of the most performed surgicalprocedures in the world. A cataract surgery replaces the natural lens thathas developed the cataract with a new clear IOL.
The rich HOYA heritage and expertise in developing optical products andtechnologies coupled with the wealth of knowledge that we haveaccumulated in developing IOLs and injectors makes us the provider of theworld’s most trusted fully pre-loaded IOLs * and has allowed us to gain
market leadership in the fully pre-loaded IOL category worldwide.
* In a pre-loaded injector, the intraocular lens is pre-installed in the injector,
supporting surgeons to perform safer and more reliable surgery.

Supply Chain

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Copyright ©2021 HOYA GROUP

Vivinex™

market leadership in the fully pre-loaded IOL category worldwide.
* In a pre-loaded injector, the intraocular lens is pre-installed in the injector,
supporting surgeons to perform safer and more reliable surgery.

INTEGRATED REPORT 2022
Supply Chain

Sales Composition of
HOYA Surgical Optics bySales by Region
By region, sales in Japan account for approximately half of total sales.

Region (FY2021)

Market Conditions
The market continues to grow roughly 7% per year in the near term,against the backdrop of the global aging population, the spread of
medical infrastructure in emerging countries, increasing accessibility toadvanced medical technologies, and pent-up demand. On top of that,premium products such as multifocal and deep depth-of-foc us types of
IOLs are driving market growth.
In fiscal 2021, recovery from the impact of the COVID-19 pandemic has

Market Share (FY2021)

progressed, although there are differences among countries and regions.
Going forward, we expect the number of cataract surgeries to recover inJapan, where recovery has been lagging, and the market to return to a
growth trajectory.
HOYA Position and Market Share
Driven by the flagship brand, Vivinex™, sales continue to gr ow at a pacethat is above the market. Vivinex™ combines an IOL material that offers
unprecedented clarity of vision with multiSert™, our proprietary 4-in-1[HOYA estimate on a value basis]

injector, which is designed to provide outstanding IOL delivery
consistency.
HOYA is steadily increasing its market share and currently holds the global
No. 3 position.

HOYA Outlook
We have further expanded our portfolio with the addition of a family of Trifocal IOLs. This has allowed us toenter the highly profitable segment of presbyopia correcting IOL market. HOYA offers a comprehensive
solution to cover any customer need and expectation in the field of cataract surgery.
Furthermore, we will expand customer reach by bolstering our sales workfor ce in regions in which wealready have sales bases and entering into new regions one by one, whether directly or indirectly(collaboration with sales agents), in pursuit of higher sales.
In China, where the market is expected to expand in the future, we established a joint venture company with
our existing partner and distribution agent GeMax in May 2020, to further increase sales by steadily
absorbing demand in China.

Artificial Bones, Metal Orthopedic Implants and Chromatography MediaBusiness Overview

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Copyright ©2021 HOYA GROUPHOYA deals in ceramic and metal implants used for filling deficient parts and joining fractured segments of

In China, where the market is expected to expand in the future, we established a joint venture company with
our existing partner and distribution agent GeMax in May 2020, to further increase sales by steadily
absorbing demand in China.

INTEGRATED REPORT 2022

Artificial Bones, Metal Orthopedic Implants and Chromatography MediaBusiness Overview
HOYA deals in ceramic and metal implants used for filling deficient parts and joining fractured segments ofbones, as well as bioceramics used in the development and production of bio-pharmaceutical products andcell culture.
Implants are mainly sold to medical institutions in Japan, while bioceramic chromatography media are soldto pharmaceutical companies and research institutions around the world t hrough distributors.

Bioactive ceramic implant “BIOPEX”

Metal orthopedic implant "HTS Stellar

Chromatography media (enlarged

D"

image)

Market Conditions, HOYA Position, and Market Share
The market of implants for neurosurgery/spinal surgery and orthopedic surgery in Japan is expected to
grow at a low single-digit rate due to the increasingly aging population. In the market of implants for NeuroSpine surgery, HOYA is a market leader, having been the first in Japan to manufacture and sell ahydroxyapatite product with more or less the same constit uents as a human bone. HOYA entered themarket of implants for orthopedic surgery through management integration with Japan Universal
Technologies, Inc. in 2012. We are manufacturing and selling metal implants that are optimized to theskeletal structure of Japanese people in terms of shape and size.
The market of separation/purification media (chromatography media) used in the development andproduction of biopharmaceutical products is expected to grow at a rate of approx. 10% globally in the years
ahead, due to the expansion of the biopharmaceuticals market. The media used varies with differences inthe separation/purification method; HOYA’s spherical ceramic hydroxyapatite media are characterized bytheir extremely high absorbability of various proteins. HOYA provides the market with a unique p roductwhose strength lies in its superior performance in terms of impurity removal separation in the purification
process for biopharmaceutical products.
HOYA Outlook
We will further accelerate growth by enhancing our product lineup, cultivating new applications andstrengthening our marketing capabilities.
In the field of ceramic implants, we will maintain our current position and strive to further expand themark et by cultivating new applications, while in the field of metal implants, we will increase our market
share by enhancing our product lineup and strengthening our marketing capabilities in an effort toaccelerate the growth of implants as a whole. For bioceramic chromatography media, we will not only
accelerate the development of products and purification processes in cooperation with our customers an dresearch institutions to meet the diversifying needs for bio-pharmaceutical products such as antibody
drugs, vaccines and even gene therapy but also expand our production capacity to meet the growing
demand in pursuit of further growth.

Information Technology
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90 BusinessLife Care
BusinessINTEGRATED REPORT 2022

Information Technology BusinessElectronics
Blanks for Semiconductors
Business Overview
In this business, we perform research and development, manufacturing,and sales of mask blanks for semiconductors.
Critical in the semiconductor fabrication process, photomasks are themaster plates used to transfer a semiconductor’s intricate and complex
circuit pattern onto a semiconductor wafer, and mask blanks are the raw
material u sed for photomask manufacturing.
Because photomasks are created for each individual circuit pattern, mask
blanks are essential to new products developed by semiconductor
manufacturers, foundries, and other HOYA customers, and in the R&D
stage of new manufacturing technologies such as those of extreme
ultraviolet (EUV) lithography.

Supply Chain

Note: In some cases, product goes via photomask manufacturer

Market Share (Optical)

Market Conditions(FY2021)

In 2021, the electronics market experienced an increase in shipment of
personal computers, smartphones, servers and other major finishedproducts. This led to higher demand for logic devices, memory, analog
semiconductors, etc., translating into 26% growth in thesemiconductor market overall. In 2022, the semiconductor market is
expected to gr ow by 16%, driven by logic devices, memory, analog
semiconductors, etc. (WSTS estimate)
Going forward, the growth of the market for mask blanks is expected
to continue, given that semiconductor manufacturers and foundries[HOYA estimate on a value basis]are briskly conducting research and development activities aimed at
the further miniaturization of electronic circuits using extreme
ultraviolet (EUV) lithography—a cutting-edge manufa cturing
technology—and that customers’ research and development demand
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91

is the key driving force for the demand for mask blanks.

Copyright ©2021 HOYA GROUP

Going forward, the growth of the market for mask blanks is expected
to continue, given that semiconductor manufacturers and foundries[HOYA estimate on a value basis]are briskly conducting research and development activities aimed at
the further miniaturization of electronic circuits using extreme

INTEGRATED REPORT 2022

ultraviolet (EUV) lithography—a cutting-edge manufacturing

technology—and that customers’ research and development demandis the key driving force for the demand for mask blanks.
Market Share (EUV)(FY2021)HOYA Position and Market Share
We have maintained a large share of the market over the long term byleveraging our strength, that is, our position as a leader in boosting
semiconductor performance.
Moreover, we have continued to conduct EUV blanks research fornearly 20 years, and have demonstrated a firm presence in this field
which has exceptionally high hurdles to clear for entry.
HOYA is enjoying an ever-growing presence as the o nly manufacturer
that has rolled out both EUV and optical (existing non-EUV lithography[HOYA estimate on a value basis]

technology) products.
HOYA Outlook
Along with the advance of miniaturization in semiconductors, it appears that demand for mask blanks for
EUV lithography will continue to be strong in the future.
Sales of HOYA Mask Blanks for EUV Lithography andNumber of EUV Scanners Installed (Volume)

Semiconductor Market and
HOYA’s Mask Blanks Growth Rate

Reference: WSTS

Mask blank sales are difficult to accurately predict due to the dramatic fluctuations that occur in line withcustomers’ development speeds, and also because they are not consumables and are not necessarily linked
to movements in the semiconductor industry as a whole. However, in regards to products for EUV
applications, the cumulative number of EUV lithography machines installed is deemed as one of theindicators of growth of the EUV market.
HOYA expands its manufacturing line as appropriate to meet customer demand. We added a manufacturing
line for mask blanks for EUV lithography in 2020 and plan to further expand our production capacity bymaking additional investments in 2022 and subsequent years. We will continue making investments to
expand production in a timely manner to meet the increasin g demand in the future.
In the field of High-NA EUV scanners (next-generation EUV scanners), which are slated to be used in
production from 2025 onwards in pursuit of further miniaturization, the challenge is to tackle the 3D maskeffect, by which the circuit pattern transferred to a semiconductor wafer is deformed as a result of
diagonally-incoming light being blocked by the photomask’s absorber. To resolve this, we are carrying out
development to make the absorber thinner with our partner in the supply chain of semiconductor
production.
HOYA INTEGRATED REPORT 2022

Photomasks for FPD

92

Copyright ©2021 HOYA GROUP

effect, by which the circuit pattern transferred to a semiconductor wafer is deformed as a result of
diagonally-incoming light being blocked by the photomask’s absorber. To resolve this, we are carrying out
development to make the absorber thinner with our partner in the supply chain of semiconductor
production.

INTEGRATED REPORT 2022

Photomasks for FPDs
Business Overview
HOYA conducts research and development, manufacturing, and sales ofphotomasks used for manufacturing FPDs *1 such as LCD *2 and OLED *3.
When manufacturing FPDs for TVs, smartphones, laptop computers, andother devices, photomasks for FPD manufacturing are used as the master
plates to transfer the circuit pattern onto the substrate.
*1 FPD: Flat Panel Display*2 LCD: Liquid Crystal Display*3 OLED: Organic Light-Emitting Diode

Supply Chain

HOYA sources the substrate from raw materials manufacturers, and on that substrate performs polishing,deposition, and resist applications (blanks manufacturing). When the manufacture of the blanks iscompleted, HOYA conducts circuit pattern drawing, developing, etching, and resist stripping and cleaning,and delivers it to panel manufacturers (photomask manufacturing).
Sales Composition by Application(FY2021)

Sales Composition by Application
The ratio of sales by application is stated as follows.
While the ratio of sales of smartphone applications is the highest, invehicle, wearable and other new applications are increasing.
Market Conditions
In fiscal 2021, panel manufacturers briskly engaged in research anddevelopment activities aimed at spurring new demand as panel prices
settled. This led to higher research and development demand forphotomasks, translating into market expansion.
G oing forward, the market is expected to grow modestly due to suchfactors as the increase in demand for photomasks for small- and mediumsized OLEDs used in smartphones, etc. In terms of geographical region,
the Chinese market is expected to grow.

Market Share (FY2021)

HOYA Position and Market ShareHOYA possesses expertise in high-precision products, and holds the topclass market share.
HOYA Outlook
We will strive for steady business growth focusing on high-precision Gen.
6 products where there are future prospects for growth and on the
Chinese market in terms of geographic region.
In October 2021, HOYA entered into a merger agreement with the BOE

93aim of enhancing
Group—a major panel manufacturer in China—with the
HOYA INTEGRATED REPORT 2022

[HOYA estimate on a value basis]

Copyright ©2021 HOYA GROUP

its FPD photomask production capacity in the Chinese market and decided

HOYA Outlook
We will strive for steady business growth focusing on high-precision Gen.
6 products where there are future prospects for growth and on the
Chinese market in terms of geographic region.

INTEGRATED REPORT 2022

In October 2021, HOYA entered into a merger agreement with the BOE[HOYA estimate on a value basis]

Group—a major panel manufacturer in China—with the aim of enhancing
its FPD photomask production capacity in the Chinese market and decided
to establish a joint venture company in China.
(The joint venture company will be established after the conclusion ofvarious ancillary contracts and the completion of legal clearance andother procedures in the relevant countries, including China.)

Panel Generations
FPD (LCD, OLED, etc.) manufacturing lines are categorized by generation, which corresponds to motherglass size. The size of mother glass has become progressively larger year by year not only because TV
screens have become bigger, but also for the purpose of enhancing productivity by increasing the numberof panel configurations per sheet. Growth is expected to continue going forward also with respect to smalland medium-sized panels centering on Gen. 6, in which HOYA has an edge, driven mainly by demand for
OLEDs for smartphones.

Glass Substrates for HDDs
Business Overview
In this area, HOYA conducts research and development, manufacturing,and sales of glass substrates for hard disk drives (HDDs). HDDs are used
as internal storage for servers and personal computers, as well as external
HDDs for personal computers and TVs.
Since HOYA’s full-fledged entry into the market of 3.5-inch substrates fordata center servers in 2017, the business has cont inued to undergo highgrowth to the extent that it accounted for 60% of the sales of the businesssegment in terms of amount in fiscal 2021.
Supply Chain

From raw material manufacturers, HOYA sources substrate raw materials, which we process in ways suchas making it into a disc shape, enhancing its shock resistance, and polishing. After processing, we deliver
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94

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this substrate to the media manufacturer where magnetic film is applied, among other film-forming
processes, and it undergoes burnishing (final polishing) and other treatments before being shipp ed. In hard

INTEGRATED REPORT 2022
From raw material manufacturers, HOYA sources substrate raw materials, which we process in ways suchas making it into a disc shape, enhancing its shock resistance, and polishing. After processing, we deliver
this substrate to the media manufacturer where magnetic film is applied, among other film-forming
processes, and it undergoes burnishing (final polishing) and other treatments before being shipped. In harddisk manufacturing, the HDD manufacturer assembles the hard disk, head, and other components, tests thecompleted product, and then ships.
Note: Media production is primarily carried out by HDD manufacturers.
Finished Products
HOYA’s 3.5-inch substrates are used in nearline (NL) storage used for backup and other purposes, mainly atdata centers.
Market Conditions
In the 3.5-inch HDD market, NL servers, having a comparatively low access frequency with backup
applications, predominantly use HDDs due to their cost advantages over solid state drives (SSDs). Althoughdata center-related investments made by large-scale cloud service vendors fluctuate in the short term,
ongoing market expansion is expected in the medium and long term as data generation volumes expand
throughout the world.
In the fields of laptop computers, external HDDs, and mission-critical servers, the market for 2.5-inch HDDs
is shrinking, as they are being rep laced by solid state drives (SSDs), which have faster data read/write
speeds. In fiscal 2021, the demand for 2.5-inch HDDs was relatively high due to the impact of COVID-19,
slowing down market contraction as a whole. This is deemed to have been attributable to the high demandfor HDDs and external HDDs for personal computers due to the continuation of high demand for personal
computers arising from Work From Home (WFH) and homeschooling, combined with the high demand for
HDDs for servers due to the recovery of on-premise expenditures that had plummeted in the previous year.
HOYA Position and Market Share
Currently, all 2.5-inch substrates are made of glass. As the sole glass
substrate manufacturer in the market, HOYA supports the HDD industry

3.5-Inch Substrate Used for NearLine Servers Market Share(FY2021)behind the scenes.
In the 3.5-inch substrate segment, products made of aluminum used t ocompletely dominate the market based on their price advantage. However,our glass substrate products are now being adopted for HDDs as they arehighly rigid and can increase the number of mounting disks by thinning thedisks, and their market share in volume terms has risen to 40%. As thestorage capacity of HDDs expands, our market share is also expected to
expand.

[HOYA estimate on a volume
basis]HOYA Outlook
Sales of 3.5-inch substrates are exp ected growth in line with the continued
expansion of the market. In the medium term, growth is expected toaccelerate through the acquisition of new customers; we will switch
existing manufacturing facilities and utilize the new plant in Laos to meetthe increase in demand.
Potential for Glass Substrates in the 3.5-inch Market
In response to the expansion of data volume and the storage volume generated worldwide, HDD
manufacturers are continually introducing in the market new products with higher data capacity per HDD.
The increase in data capacity per HDD has been realized by increasing the recording density or area of thedisk, but, at present, the development of technologies designed to improve recording density is stagnating,

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HOYA GROUPHOYA
INTEGRATEDREPORT
2022key 95
and the expansion of therecordingarea
remains
to capacity
expansion.

Potential for Glass Substrates in the 3.5-inch Market
In response to the expansion of data volume and the storage volume generated worldwide, HDD
manufacturers are continually introducing
in the market
new products
INTEGRATEDREPORT
2022 with higher data capacity per HDD.

The increase in data capacity per HDD has been realized by increasing the recording density or area of thedisk, but, at present, the development of technologies designed to improve recording density is stagnating,and the expansion of the recording area remains key to capacity expansion.
In the 3.5-inch market, the disk material is now mainly aluminum alloy. However, since a further increase inarea can be realized by increasing the number of mounting disks by thinning the disks, it is becoming
necessary to use glass instead of aluminum alloy as the former has higher rigidity and allows for morethinning.
In the future, if the number of disks mounted in a single HDD increases to 11, the substrate’s thickness is
expected to become 0.5mm or less, in which case the productivity of aluminum substrates is expected tofall, and from 2024 onwards, substrates for nearline (NL) storage is projected to be in sh ort supply.
In the event that Heat-Assisted Magnetic Recording (HAMR)—a next-generation recording technology forhigher recording density—is realized and commercialized, glass substrates with high thermal resistance willbe the only option because HAMR requires high temperature in the magnetic film production process (theheatproof temperature of glass is 691 degrees Celsius, whereas that of aluminum alloy is 290 degrees
Celsius).
While 2.5-inch substrate products are expected to decrease as more and more HDDs in external HDDs,
personal computers and mission-critical servers continue to be replaced with SSDs in the future, we will
pursue the growth of the business as a whole by offsetting this with an increase in sales of 3.5-inch
substrate products.

Imaging
Imaging-related Products (Including optical glass, optical lenses, camera lens units,
and lasers)
Business Overview
In this area, we conduct research and development, manufacturing, andsales of optical lenses for a variety of cameras, as well as for optical glassmaterials.

Supply Chain

HOYA sources materials from optical glass material manufacturers, conducts compound and solution
treatments, manufactures lens materials and lens products, and delivers to lens and camera
manufacturers.
Sales Composition by Application
The ratio of sales by application is as the right figure.

Sales Composition by Application(FY2021)

Digital camera-related items for compact digital cameras,interchangeable lenses,
etc. that had previously made up the
majority
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96

of sales are trending down, and now account for approximately 40% of
total sales.

HOYA sources materials from optical glass material manufacturers, conducts compound and solution
treatments, manu factures lens materials and lens products, and delivers to lens and camera
manufacturers.

INTEGRATED REPORT 2022
Sales Composition by Application(FY2021)

Sales Composition by Application
The ratio of sales by application is as the right figure.
Digital camera-related items for compact digital cameras,interchangeable lenses, etc. that had previously made up the majorityof sales are trending down, and now account for approximately 40% of
total sales.
Market Conditions
The amount of shipment of interchangeable lenses for single-lensreflex (SLR) cameras and mirrorless cameras substantially increased
due t o the increase in sales of new products for high-end cameras andthe recovery from the previous year when sales had suffered from theimpact of COVID-19.
HOYA Position and Market Share
From research and development of optical glass composition to

Share of Aspherical GMO Lenses(Digital Camera-Related)(FY2020)

manufacturing of finished products of lenses, HOYA takes a consistent
approach to its activities while building a structure that makes
possible the mass production of an array of products.
HOYA maintains a high market share with its exceptional skills in
aspherical glass molded (GMO) lenses.
GMOs are formed by directly pressing optical glass that has been
subjected to high temperatures to make it malleable. These are opticallens products that require no polishing, and possess an excellent[HOYA estimate on a value basis]

ability to correct distortions. Enabling a high angle design, the numberof lenses used in optical systems can be reduced, and this contributes
to compact, lightweight, and highly functional end-product cameras.
HOYA Outlook
Applications for interchangeable lenses for SLR cameras are not expected to decrease as drastically as
before due to the increase in sales of high-end cameras.
We will steadily expand the sale of optical products for new applications such as car-mounted cameras inan effort to stabilize the business as a whole.
For new applications, we are enhancing our sales activities for the adoption of HOYA products in advanced
driver-assistance systems (ADASs), optical zooms for mobile devices and Augmented Reality (AR)/Mixed
Reality (MR). In particular, their potential in the market of car-mounted cameras for image recognition in
ADASs looks promising; we expect them to make a significant contribution to our business results when thepractical application of this technology go es into full swing in a few years’ time.

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