Corporate Data
March 31, 2012
Company NameHOYA CORPORATIONHead Office

2-7-5 Naka-Ochiai, Shinjuku-ku, Tokyo 161-8525 Japan

Established

November 1, 1941

Business Domains

HOYA is a Japanese multinational company and the leading supplier ofinnovative precision products based on its optics technologies. HOYA isactive in the fields of Life Care and Information Technology providing
eyeglasses, medical endoscopic system, intraocular lenses, optical lenses aswell as key components for the semiconductor devices, LCD panels and
HDDs.

Paid-Capital

6,264,201,967 yen

Number of Employees

HOYA Group Total; 32,363

Revenue

376,940 million yen (2012.3 Conosolidated, all operations)

Profit before Tax

58,530 million yen (2012.3 Conosolidated, all operations)

Main ProductsElectronics●Mask blanks/photomasks for semiconductors●Photomasks for LCDs
●Glass disks for hard disk drives

Imaging●Optical lenses/glasses●Lens modules for digital camera●Micro lenses●Lazer equipments

Health Care

●Eyeglass lenses●Contact lenses and accessories

Medical●Medical endoscopes●Intraocular lenses●Bone prosthesis

Other●System architecture

Directors
Board of Directors and Executive Officers (as of June 20, 2012)
Yuzaburo Mogi

Director*, chairman of the Nomination Committee, member of Compensation
Committee and member of Audit Committee (Honorary CEO, Chairman of the Boardof Kikkoman Corporation)

Eiko Kono

Director*, chairman of the Compensation Committee, member of Nomination
Committee and member of Audit Committee (Formerly, Special Advisor to RECRUIT
Co., Ltd.)

Yukiharu Kodama

Director*, chairman of the Audit Committee, member of Nomination Committee andmember of Compensation Committee (President of the Mechanical Social Systems
Foundation)

Itaru Koeda

Director*, member of the Nomination Committee, member of Compensation
Committee and member of Audit Committee (Chairman Emeritus and Advisor of
Nissan Motor Co., Ltd.)

Yutaka Aso

Director*, member of Nomination Committee, member of Compensation Committee
and member of Audit Committee (Chairman and Representative Director of Aso
Corporation)

Hiroshi Suzuki

Director, President & CEO

Kenji Ema

Director, Executive Officer & CFOTaro Hagiwara

Executive Officer, Technology* Mr. Yuzaburo Mogi, Ms. Eiko Kono, Mr. Yukiharu Kodama, Mr. Itaru Koeda and Mr. Yutaka Aso are outside directors as indicated in the 15th item, Article 2 of theCompanies Act.

Copyright 2012 © HOYA CORPORATIONHistory
1940s1941 Nov

An optical glass production plant was established in the city of HOYA in metropolitan Tokyo,
and production of optical glass began.

1944 Aug
1945 Oct

The plant incorporated with capital of 1.2 million yen.
HOYA discontinued production of optical glass at the end of Second World War andlaunched crystal products.

1950s1952 Feb

The manufacture of optical glass BK7 (borosilicate glass) resumed.

1960s1960 Nov

Showa Plant (Akishima city, Tokyo, the present Akishima Plant) wasestablished.

1961 OctHOYA listed on the Second Section of the Tokyo Stock Exchange.

1962 May

The manufacture of eyeglass lenses began.

1967 Apr

The company launched progressive multifocal lenses.

1970s

1972 Dec

The production of soft contact lenses began.

1973 Feb

HOYA listed on the First Section of the Tokyo Stock Exchange.

1974 Jan

Nagasaka Plant (Yamanashi prefecture) was established and theCompany began production of IC substrates.
The company introduced online ordering system for eyeglass lens.

1980s1983 Jan

Hachioji Plant (Tokyo) was constructed and production ofphotomasks for semiconductors began.

1984 AugThe Company renamed HOYA Corporation, and the current Head
Office was completed.

1985 May

Production of large photomasks for LCD began.

1986 Oct

R&D Center in the city of Akishima was completed.

1987 Jun

HOYA launched intraocular lenses (IOLs) and aspherical moldedglass lenses.

1989 Apr

HOYA established HOYA Europe B.V. in the Netherlands (currently
HOYA Holdings N.V.) and HOYA Corporation USA to reinforce
global management.

1990s1991 MarHOYA launched glass disks for HDDs.

1993 OctFirst Group's Philosophy of Environment issued.

1995 Jun

HOYA invited the first outside director.

1996 AugHOYA formed an alliance with IBM to develop a next-generation
glass disk for HDDs.

Nov

Kumamoto Plant was completed.

1997 Apr

HOYA introduced its “internal company system,” reorganizing Group
operations centered on two internal companies (Electro-Optics andVision Care) and three subsidiaries (HOYA Photonics, Inc., HOYA
Healthcare Corporation, and HOYA Crystal Corporation).

May

HOYA established HOYA Holdings Asia Pacific Pte Ltd, as the third
regional HQ after HOYA Holdings N.V. and HOYA Holdings, Inc.,Dec

the regional HQs for Europe and North America, respectively.
HOYA LENS DEUTSCHLAND became the first Group company toreceive ISO 14001 certification.

1998 Apr

HOYA began the quarterly release of consolidated financial results.
Itsukaichi Plant became the Group's first domestic facility to receive
ISO14001 certification.

1999 Feb

All major domestic plants received ISO14001 certification.

2000s

2000

Jul

HOYA acquired manufacturing section of photomasks for semiconductors from OKI ElectricIndustry Co.,Ltd.

2001 MayHOYA launched HOYALUX Summit Pro and NuLux lenses that use
EYRY, a high-index, plastic lens material.

Oct2002 AugHOYA began manufacturing soft intraocular lenses.

Technical alliance formed with Dai Nippon Printing Co., Ltd. to jointly
develop mask blanks for next generation semiconductors.

2003 JunJul

HOYA established a company-with-committees system.
HOYA transferred its global financial management operations toregional HQ in Europe.

2004 MarOct

HOYA acquired the HDD glass disk business of Nippon Sheet GlassCo., Ltd.
HOYA established a Level 1 American Depositary Receipt (ADR)
program.

2005 NovHOYA common stock split four-for-one.

2006 Mar

Subsidiary HOYA Advanced Semiconductor Technologies Co., Ltd.
was merged with HOYA Corporation.

2007 AugAs a result of the tender offer, PENTAX became a consolidated
subsidiary of HOYA Corporation.

2008 MarHOYA and PENTAX merged.

2009 MarHOYA terminated the Crystal business.

Sep

HOYA launched the first small incision preloaded insert system“iSert” in the USA.

Oct

The eyeglass division relocated its headquarters from theNetherlands to Thailand, home to a cutting-edge production facility.

2010s2010 JanHOYA Healthcare Co. Ltd. was absorbed by HOYA Corporation and became Eye Care

Jun

Division.

Oct

HOYA sold the HDD glass media manufacturing business.
HOYA transferred the specialty glass business for imaging sensor to its wholly owned
subsidiary, HOYA CANDEO OPTRONICS.

2011 OctHOYA sold PENTAX Imaging Systems business to Ricoh Company, Ltd.

Copyright 2012 © HOYA CORPORATION

Products
HOYA secures stable earnings and sustained corporate growth by adopting portfolio management withmultiple business segments.

Copyright 2012 © HOYA CORPORATIONMask Blanks/Photomasks for Semiconductor Manufacturing
Mask blanks and photomasks are essential in the production ofsemiconductor chips. They are the master plates used to transfer the minute,highly complex circuit patterns for semiconductors onto the wafers that
become IC chips. A mask blank is a six-inch glass substrate polished
precisely* and coated with a metallic film and photosensitizing agent. This
substrate becomes a photomask when a circuit pattern is drawn onto it with
an electron beam (EB) or laser. In the production of semiconductors, an
exposure system is used to transfer the circuit pattern on the photomask onto
the semiconductor wafers.
* HOYA's mask blanks are polished flat to an accuracy of less than one thousandth of amillimeter, with a surface roughness of only one millionth of a millimeter (one nanometer).

Transfer image of circuit pattern in the
exposure process

HOYA's mask blanks boast an overwhelming market share. The company
provides a wide variety of mask blanks, from those for leading-edge
development, to commoditized products, to semiconductor manufacturers
and photomask manufacturers in Japan and overseas. In addition to ensuring
a stable supply of high-quality products, HOYA customizes its products to suitthe process of each customer. It thus provides high added value, including
contributing to the improvement of customer yields.

Toward Progress in the Miniaturization and Development of EUV Lithography
As the circuit density of semiconductors has been growing greater, design
rules (the width of the lines of the circuit drawn on a wafer) have been
becoming finer every year — from 90nm to 65nm, 45nm, and 32nm. As of
2012, the line width of advanced circuits has been scaled down to as narrowas 28nm, or even 22nm. Amid this trend toward miniaturization, fine circuit
patterns need to be drawn with high precision and resolution. The trend also
requires flawless quality, that is, mask blanks and photomasks with absolutely
no scratches or distortion.
Meanwhile, the development of extreme ultraviolet (EUV) lithography has
been in progress. EUV's wavelength is only 13.5nm, while the wavelength of
the ArF laser, the current light source of exposure systems used insemiconductor production, is 193nm. As the next light source, EUV is beingdeveloped to enable further semiconductor miniaturization. It is expected tolead to even higher-density semiconductors. Electronic devices thatincorporate such chips will be faster, smaller and more versatile. It appears
that the commercial production of these semiconductors will not begin until
2015 at the earliest, which means that it will take some time. HOYA is
progressing steadily with the development of mask blanks and photomasksthat will work with EUV lithography.
Progress in miniaturization is expected to lead to demand for even higher
specifications of mask blanks and photomasks. As the leading company inmask blanks, HOYA will continue to support the semiconductor industry by
developing state-of-the-art technologies.

IBD (Ion Beam Deposition) system to form
reflective Mo/Si multilayer for EUV
lithography

Copyright 2012 © HOYA CORPORATION

Large-Size Photomasks for Liquid Crystal Displays
LCD photomasks are the master plates used in the manufacture of the LCD
panels found in LCD televisions, computer monitors, and smartphone screens.
They are the essential parts for LCD panel production. In 1985, HOYA
pioneered the development and production of LCD photomasks by applying its
technologies for semiconductor photomasks.
LCD panels have grown significantly in the past ten years, led by growing
demand for LCD televisions, which has been increasing in size every year.
Accordingly, HOYA's LCD photomasks have also grown larger. In addition to

LCD photomasks

the size, the required level of mask quality has been getting higher. Amid thistrend, HOYA provides panel manufacturers with high-quality, high value-added
products by making use of the technologies it has cultivated through thedevelopment of semiconductor photomasks.

Toward Further Growth
In addition to the spread of LCD TVs, recent years have also seen the explosive
growth of smartphones. This has resulted in a significant increase in demand for
medium- and small-size photomasks. Unlike those for LCD TVs, thesephotomasks are generally required to be highly precise. This is another area inwhich HOYA's technological excellence is utilized.

LCD Photomask plant in Taiwan

Copyright 2012 © HOYA CORPORATION

Glass Memory Disks for Hard Disk Drives
Apart from their well-known use in notebook computers, hard disk drives(HDDs) are also found in car navigation systems and digital video cameras. The
recording media for hard disk drives used in such mobile devices has to be able
to prevent data loss, which means it must have the ability to withstand vibrationand shock. Glass memory disks have superior shock-resistance characteristics
in comparison to the aluminum disks that are used in non-portable equipment.
HOYA, a pioneer in the development of the glass memory disks, manufacturesand sells the substrates (polished glass) of the glass disks. The majority of

Glass disks for HDDs

sales are from 2.5-inch disks, which boast superior surface smoothness andreadiness for large-capacity HDDs. Due to these advantages, HOYA holds a
global market share of over 70% for these disks.
The HDD market is expected to continue expanding alongside growing demandfor even larger capacities in data storage, with HDDs remaining competitive interms of both price and reliability. This is despite the emergence of a number ofcompeting storage device technologies, including Internet-based cloudcomputing and solid state drives (SSD) using flash memories. At the same time,higher storage densities in HDDs will require glass disks of even higher quality.

Growing Capacity of Glass Memory Disks
The capacity of HDDs has been growing rapidly, from 160 gigabytes (GB)through 250GB to 320GB. Currently, products with a capacity of 500GB per
platter are being produced commercially. The capacity increase of HDDs
requires improvement in the quality of glass memory disks. In this environment,
HOYA will continue to respond to customer needs through the stable productionof high-quality products by taking advantage of its technological excellence.

Glass disk (substrate) plant in Vietnam

Copyright 2012 © HOYA CORPORATION

Optical Glass
HOYA provides glass with the optical properties demanded by the market. The
data on glass composition included in the database amounts to as many as
50,000 pieces. Around 100 of them are used for the lenses that HOYA currently
provides. As an expert in optical lenses, HOYA considers not only the opticalproperties but also the ease of processing of its products.

Optical glass

Optical Lenses
HOYA's optical lenses can be categorized into two basic types: polished glass
lenses (spherical lenses) and molded glass lenses (aspherical lenses). HOYA's
aspherical lenses are formed at high temperatures in metal molds from molten
optical glass.
Because of their sophisticated shapes, aspherical lenses offer excellent
correction for aberrations, making it possible to shorten focal distances andreduce the number of lens elements. This contributes to higher functionality for
optical devices like digital cameras, as well as to the smaller size and lower
weight of such devices.
HOYA will continue to support the further evolution of optical lenses by taking
advantage of its integrated system of production, from glass materials tofinished lenses, and by developing glass materials that add value to products.

Copyright 2012 © HOYA CORPORATION

Aspherical molded glass lenses

Eyeglass Lenses
As a global manufacturer of eyeglass lenses, HOYA has passionately driven
optical technology innovation with the aim of finding only the best vision
solutions. As HOYA tirelessly pursues better ways to manipulate light, HOYA
knows that the sharp focus of its Research and Design will lead to higher
quality lens solutions.
HOYA has been a leader in innovative optical technologies for over 50 years.
HOYA's passion for creating the most profound vision solutions identifies theunwavering promise to provide eye care professionals and their patients withpowerful optical technologies.
HOYA's proprietary technologies and award winning designs create theultimate benchmark in lens performance, style and comfort.
BALANCED VIEW CONTROL
Balanced View Control is HOYA's unparalleled technology that creates a
profoundly clear vision experience for the progressive lens wearer. Patented
3D visualisation methods are used to simulate and verify the patient's visual
perception when looking at objects at various distances, in different directionsof gaze and while moving.
INTEGRATED DOUBLE SURFACE DESIGN (iD)iD is HOYA's patented, award-winning design technology that separates thesurface geometry of progressive lenses into two components: vertical andhorizontal, positioned individually on each of the two lens surfaces. Thanks tothis technology, HOYA's premium progressive lenses can be individuallydesigned; each patient's unique visual and lifestyle requirements can be
integrated in the lens design to provide them with the most comfortable andaccurate vision, tailored to their individual needs.
In addition to its range of high value-added lenses and to answer theincreasing demand for low cost, entry-level products, especially in emerging
markets, HOYA provides a wide range of commodity eyeglass lenses to meet
consumer requirements worldwide.

Copyright 2012 © HOYA CORPORATION

Eyecity, a Chain of Contact Lens Specialty Stores
HOYA directly manages Eyecity, one of the largest chains of contact lens
specialty stores in Japan. Eyecity's strength lies in the way it sells products tocustomers, with the store staff suggesting the optimal product for eachcustomer as they undertake consultations with them.
Eyecity also boasts a wide array of products from renowned manufacturers allover the world. As of March 31, 2012, HOYA operates a total of 192 Eyecity
stores throughout Japan. The contact lens market in Japan is faced with thedemographic problem of the low birthrate and longevity. Young people in the
population, who are potentially new contact lens customers, are in decline.
Despite this trend, Eyecity secures a high level of customer satisfaction throughits high-quality customer service. As a result, it has continued to expand its
business steadily and maintains the largest share in the contact lens retailmarket in Japan.
At each Eyecity store, well-experienced professional staff, equipped with theappropriate knowledge and the latest product information, sell products tocustomers through individual dialogues with them. On the advertising and sales
promotion front, Eyecity has continued to convert from paper media such as
flyers and free community paper inserts to TV commercials and digital media
including internet ads and e-mail newsletters. This has contributed greatly towinning new customers.
In March 2011, Eyecity introduced its new logo. The logo was designed in the
motif of an eye, as the symbol of the company's focus on beautiful eyes. The
large circle symbolizes a beautiful eye, while the small circle expresses the lightreflected from the eye. The bright, moist eye symbolizes Eyecity's pride anddetermination as a company that provides customers with consultations tomake their eyes more attractive.

Copyright 2012 © HOYA CORPORATION

Intraocular Lenses for Cataract Treatment
The number of cases of cataracts attributed to aging has been growing rapidly
due to the aging of the global population. Cataracts are a disorder of the eye, or
clouding that develops in the crystalline lens of the eye due to aging. They not
only cause vision loss, but potentially lead to blindness if untreated. An
intraocular lens (IOL) is an artificial crystalline lens used in an eye from which aclouding crystalline lens has been removed during cataract surgery. It is aninnovative medical device that enables people who once suffered fromcataracts to see normally again.

Pre-loaded IOL delivery system “iSert™”

There are two types of IOLs. One is a hard lens. The other is a soft, foldable
intraocular lens that allows the optical portion to be bent, permitting insertion
through a small incision. In recent years, demand for soft IOLs has been
growing as they reduce the burden on patients during surgery.
HOYA manufactures and sells lens injection systems that facilitate surgery,along with soft, foldable IOLs that can be inserted through extremely small
incisions (the world's smallest 1.8mm incisions). In 2007, the company released
the iSert™ pre-loaded IOL delivery system. This product boasts significantly
higher operability than conventional products, and is contributing to healthcare
as a solution that ensures safe, secure cataract surgery.
The mainstay product, the iMics1, is a revolutionary IOL featuring both a sharpedge and smooth optical surface. HOYA developed this product by usingmaterials proven to be safe and effective and by designing the asphericalsurface in a unique way. The company provides ophthalmologists with the
product in a pre-loaded surgical insertion system, which also minimizes theincision size.
In 2009, HOYA entered the United States, the world's largest cataract IOL lensmarket. The company commenced full-scale operation in the country with theiSert, the country's first pre-loaded IOL delivery system permitting a small
incision size.
In Japan, HOYA launched the IOL business in 1987, or 25 years ago. The
company's products are highly acclaimed in hospitals and clinics for theirsuperior operability, as well as the high-quality lenses.
In 2011, HOYA transferred the headquarters of this business from the UnitedStates to Singapore. The company has since been working on expanding thebusiness in the global market.

Copyright 2012 © HOYA CORPORATIONIOL plant in Singapore

Medical Endoscopes
Medical flexible endoscopes are used to examine the interior of human organs,permitting the early detection and treatment of disease in the organs. They areused in minimally invasive medical procedures, and are therefore being
introduced worldwide as a method that is beneficial for both physicians andpatients.
Medical flexible endoscopes have been used mainly for the observation andexamination of abnormal regions. They now also permit the immediate
treatment of observed abnormal regions. With this and other improvements infunctions and performance, the range of use of the endoscopes has been
expanding year by year.

Endoscope system

In recent years, there has been an increasing number of countries wherecolorectal examinations using endoscopes are recommended for people whohave reached a certain age. Accordingly, medical practices using flexible
endoscopes are expected to continue spreading.
HOYA provides the i-Series endoscope systems, which permit the megapixel
resolution of images. With a wide array of products, including video scopes andfiberscopes, and high-quality after-sales services, HOYA contributes todiagnosis, treatment, and medical research in diverse departments, including

Distal end of scope

those related to the digestive organs, otorhinolaryngology, and respiratory
disease.
The i-Series products, which were launched in 2007, are highly acclaimed forthe megapixel resolution of endoscopic images, enabled by technologies thatsignificantly improved picture quality and image processing performance overprevious products.
In addition, HOYA is also applying its creative technologies to the developmentof products that will contribute greatly to the early detection of affected areas,such as the autofluorescence imaging endoscope, confocal endoscope, highpower endoscope, and ultrasound endoscope.
The company has also developed and manufactures endoscopic treatment
tools. Combined with endoscopes, these tools permit the collection of bodytissue samples and the incision of affected areas without opening the abdominal
cavity. Medical practices using endoscopes have gone through various
evolutions, from “mere observation,” to “detection of affected areas,” to thephase of “diagnosing and treating abnormal areas” without opening theabdominal cavity.

Copyright 2012 © HOYA CORPORATION

Laparoscopic surgical instrument

Bone Prostheses(Prosthetic ceramic fillers)
Apatite products, the mainstay products of HOYA's New ceramics division, areused mainly in the fields of orthopedics, brain surgery and dentistry as
prosthetic fillers for bone defects. APACERAM, one of HOYA's apatite products,
boasts the overwhelming top share in the ceramic artificial bone market. It is
made of hydroxyapatite, a chemical compound that is virtually the same as theconstituents of human bone. Hydroxyapatite implantation is safe, and in fact,over time, the implant is partially resorbed and replaced by natural bone, as it
becomes part of the body.
SUPERPORE™

HOYA also launched a solid-type prosthetic filler, SUPERPORE™, in 2010.
The Company also launched a paste-type prosthetic filler, BIOPEX®
ADVANCE, which reaches maximum strength in just 12 hours after surgery.
This gained kudos for greatly improving the quality of life of patients, byenabling them to rise up the day after surgery.
In 2012, HOYA could gain a foothold through entering the market for metallic
implants, which has a size of 120 billion yen. The company is determined tofocus its efforts on the development of new products combining ceramics andmetals.
Porosity of SUPERPORE™

Copyright 2012 © HOYA CORPORATIONThe idiom “big fish in a small pond,”
is a straightforward way of
expressing HOYA's businessstrategy. In other words, HOYA
seeks to maintain its position as anindustry leader in the niche market
where it creates pioneering
products. HOYA maintains highmarket share and maximizes
corporate value by creating newmarkets with its proprietary
technologies.

Copyright 2012 © HOYA CORPORATIONHOYA Group operates on the basis of
portfolio management, which ensures the
profitability, stability, and growth potentialof the Group as a whole, while
maintaining a balance among its multiple,
diverse business segments.
HOYA allocates investments according tochanging times, working to both maximize
corporate value and ensure sustained
growth.

Copyright 2012 © HOYA CORPORATIONHOYA is operated and managed throughglobal consolidated group management.
The independent management teams ofbusiness segments, including Information
Technology and Life Care are responsible
for executing management strategies.
Regional headquarters in America,
Europe and Asia support business
operations by strengthening relationships
with countries and areas in the respective
regions such as by providing legal
support and conducting internal audits.

Building a Global Business
HOYA seeks optimal local production and optimal local sales on a global scale.
To deliver HOYA's products and services to customers around the world quickly andefficiently, HOYA is accelerating the shift of its production and sales bases overseas,with a focus on matching optimal local production and optimal local sales with its
worldwide business. As of March 2012, overseas production accounted for 70% of
total production, and overseas sales approximately 60% of total sales.

Global Personnel Organization
HOYA promotes global personnel to executive positions.
As of March 2012, the total number of Group employees stood at approximately
32,000 persons, of which about 90% are overseas personnel. As it expands its
business to the world, HOYA encourages localization, and this includes appointing
local staff to management roles.

Global Management
HOYA accelerates the globalization of management in step with the globalization of its
businesses.
Among various businesses, the three Life Care businesses (medical endoscopes,
eyeglass lenses and intraocular lenses) for which business strategies need to be
formulated and executed particularly from a global perspective are headed bypersonnel with a wealth of knowledge and experience in their respective fields,
regardless of nationality. Each division develops business at the optimal location.
HOYA shifted its financial headquarters in 2003 to the Netherlands, the optimal
location for formulating and executing financial strategies. In 2011, HOYA
established a CEO Office in charge of the Group's portfolio strategies in Singapore,
which is located in a center of Asian markets that are expected to enjoy substantial
growth in the future. The CEO Office takes command of Hoy's global strategies.

In 1997, HOYA changed its management
benchmark from return on equity (ROE) toshareholder value added (SVA), whichtakes into consideration the cost ofcapital. ROE, an index that emphasizes
the effective use of capital, measures the
profit a company has made using thecapital that its shareholders haveentrusted to it. In contrast, SVA takes into
account the cost of capital, so it attaches
great importance to the corporate value. It
subtracts the cost of capital from the net
income generated by business activities,
yielding the added value that has actuallyaccrued to the corporate. Prior to 1997,
HOYA had already adopted amanagement stance of “consider
shareholders first.” It then took thisprinciple one step further with the
adoption of the SVA index, as part of its
commitment to maximizing corporate
value.

SVA management
Corporate value-oriented management focused on the extent to which profit has exceeded thecost of capital.
SVA management emphasizes the extent to which the profits a company generates
exceed the cost of assets, using the company's assets. When profits exceed thecost of capital, corporate value increases. SVA management satisfies all of thecompany's stakeholders first, and then increases corporate value.
SVA and MARKET VALUE* MVA is the aggregate each year of single-year SVA discounted by the cost of capital at current value.

Cash Flow Management
HOYA emphasizes capital efficiency in its management.
In 1998, HOYA became one of the first Japanese companies to begin disclosing
cash flow statements quarterly together with the traditional financial statements.
From early on, HOYA has sought to emphasize capital efficiency in its management.
Cash Flow

Copyright 2012 © HOYA CORPORATIONCash and cash equivalents, end of yearIn order to keep guard against thepotential for stagnation in the Board of
Directors system, HOYA has gradually
reduced the number of directors, and in
1995 began appointing outside directors.
The current Board of Directors comprises
five outside directors and three internal
directors, for a total of eight. With morethan half of the Board coming fromoutside the Company, management
supervision is enhanced andtransparency is ensured. HOYA isgoverned under the “company withcommittees” system as defined by theCompanies Act of Japan. All members of
the Nomination Committee,
Compensation Committee and Audit
Committee are outside directors, helping
to enhance the soundness of HOYA's
management.
Copyright 2012 © HOYA CORPORATION

Environmental activities —HOYA’s Approach to theEnvironment—
HOYA actively engages in environmental preservation efforts as part of its corporate social
responsibility in order to pass on to future generations a global environment in better shape than
today.
Administrative structure for the Group-wide environmental protection
HOYA's environmental protection activities had their inception when the Pollution
Control Committee was created for each factory of the Group in 1976. Then the
HOYA Group Environmental Philosophy and Fundamental Environmental
Policies were formulated in 1993, and the Rules for the Group's Environmental
Management Organization were established in 1996. Thus, according to thoseguidelines and rules, the environmental protection (conservation) organization of
the HOYA Group had been managed under the supervision of the Headquarters
Environmental Conference as the supreme decision-making body headed by theCEO.
In October 2008, the environmental protection organization and the occupationalsafety and health organization of the Group were merged with each other, andconsequently the above-mentioned Headquarters Environmental Conference wasabolished. Since then, with the new structure supervised by the HOYA Group
Director for Environmental Protection, Occupational Safety and Health, the Grouphas been conducting various activities of environmental protection.
HOYA Group Environmental and Occupational Safety and Health (OSH)
Organization

At the end of March 2010, the basic specifications for the environmental facilities(installations) within HOYA were defined, and the HOYA Group Environmental
Protection Standard for Facility was issued with the purpose of preventing such
installations from having any harmful impact on the environment inside andoutside the workplaces. With the issuance of the standard, the Group is now
ready to introduce environmental facilities (installations) after carefulconsideration of possible environmental burdens inside and outside theworkplace from the design stage.

Case examples of activities for reducing environmental burdens
The HOYA Group has been carrying out various environmental burden reduction
activities under its Environmental Philosophy and Fundamental Environmental
Policies.

1. Soil pollution control measures, underground water pollution control measures, hazardous
substance leak control measures●Use of double-shell structure for underground tanks
It is difficult to take adequate leak prevention measures for underground tanks,
which do not allow airtightness tests often used to check hermetically-sealed
tanks. Therefore, a measure normally taken is applying an anticorrosion coatingon the inside surfaces of the tank and conducting periodic inspections to checkfor cracks. However, a drawback of such a measure is that by the time any defectis discovered, a hazardous substance may have already leaked outside, thus
requiring lots of manhours to remedy the situation.
At our plant in Hokuto City, Yamanashi Prefecture, a project is going on and will
be completed in the fiscal year 2012. In the project, a coating sheet made of FRP(fiber-reinforced plastic) will be installed on the interior walls of existingunderground organic waste fluid tanks. This is to make over those tanks into adouble-shell structure according to the HOYA Group Environmental Protection
Standard for Facility, which was issued in March 2010 in anticipation of therevision of the Water Pollution Control Act in June 2012. The makeover will
include the installation of leak detecting tubes between the coating sheet and thewall to detect leaks if any. The plan for this project was formulated in the fiscal
year 2011.

●Renewal of aging tanks at the effluent treatment facility and repair of tank dikes in chemical storage area
At our plant in Koka City, Shiga Prefecture, the aging PAC tanks of the chemicaltanks at the effluent treatment facility were replaced with new ones as a measure
to reduce the risks of environmental accidents due to tank failures.
Also, the tank dikes in the chemical storage area of the effluent treatment facility
within the Koka plant were subjected to the following improvements in compliancewith the HOYA Group Environmental Protection Standard for Facility:
・Separation of adjacent acidic and alkaline tanks from each other・Division of the interiors of the tank dikes into the acidic and the alkaline
sections
・Repair of tank dikes showing advanced corrosion

2.Proper Disposal of Industrial Waste●Disposal of low-concentration PCB waste
Until recently, there has been no well-defined method for disposal of waste
containing low-concentration PCB (polychlorinated biphenyl). Thus such waste
was stored within the factory after taking some leak prevention measure for it.
With the arrival of a combustion disposal method, it is now possible to entrust thedisposal to a licensed contractor. In the fiscal year 2011, therefore, our plant at
Hokuto City, Yamanashi Prefecture consigned the disposal of four units of highvoltage transformers as waste containing low-concentration PCB to a licensed
contractor. In this commission of disposal, the contractor was asked to faithfully
observe the Japanese government's Guidelines for Collection and Transportationof Low-concentration PCB Contaminated Electrical and Other Waste and otherapplicable laws and regulations. Also, it was confirmed that the collection andtransportation of the units to the disposal site should be performed properly andsafely according to the preliminary agreements and in compliance with the Road
Traffic Act and other related laws and regulations. Thus, prior confirmation
between the parties concerned covered the operation procedure including that forthe purging of oil before the transportation, the safety management system to be
employed, the qualification of the workers, the emergency response whennecessary, etc., and the disposal was completed in April 2012.

●Donation of profit on sale of industrial waste
The plant in Koka City, Shiga Prefecture outputted part of its industrial waste as
valuables and donated the profit on sale of them to the “Mother Lake Shiga
Campaign” site. The contribution was made twice in a year, which amounted to¥239,016 in the first half of the fiscal year of 2011. The donated money will be
used in environmental projects related to Lake Biwa. A description of thecontribution was posted on the Internet web page of the Shiga Campaign Site.

●Recycling of the empty cases of contact lenses
The contact lens outlets “Eye City,” which are an operation of HOYA’s Eye Care
Division, have been carrying out the Eye City ECO Project since 2010. This
project aims to promote the recycling of the empty cases of the now-mainstream
disposable contact lenses recovered at 193 outlets of ours in Japan. The empty
plastic cases recovered by those retail outlets were sold to recycling contractors,
and the Division contributed the payment received for the sale plus the equalamount of the HOYA donation to the Japan Eye Bank Association.
The total of the donations from April 2010 to September 2011 amounts to¥1,223,560.
The recovery of the empty cases from this recycling activity amounts to 40.86
tons, which is equivalent to 128.71 tons of CO2 reductions. The area of forest
needed to absorb this amount of carbon dioxide is as wide as 5.6 Tokyo Domes.
As part of this recycling project, the aluminum seals on the empty plastic cases
are also recovered and sold to the recycling contractors.
According to the survey of the Eye City Net members in August 2011, 68 percentof the members did not know that the empty cases of the disposable lenses canbe recycled. Yet, 75 percent of the members responded to the questionnaire thatthey are willing to help the recycling by keeping the empty cases of thedisposable lenses. Thus the Eye City ECO Project is now an activity increasingly
appreciated and backed up by the Eye City Net members.

3. Efficient use of resources● Recycling of water in deionized water production
At our plant in Pyeongtaek City in Korea, the deionized water production line was
expanded to two systems in answer to the rise in the use of deionized water. Until
recently, the RO water* discharged from the process of deionized waterproduction had been disposed of as wastewater. However, the reuse of this waterin the newly added line is keeping the use of water at a limited level.
* RO (reverse osmosis) is a technique of causing a “reverse osmosis” by applying a largepressure to a semipermeable membrane in opposition to the osmotic pressure. The RO water isthe water produced by the use of a reverse osmosis (RO) membrane.

4. Energy saving and power saving activities● Installation of demand monitors and replacement of fluorescent lamps
The power supply in Japan today is precarious due to the shutdown of nuclear
power plants after the tsunami disaster. In consideration of the situation and withthe purpose of reducing power cost, the plant in Koka City in Shiga Prefecture
has installed demand monitors for measuring the electric energy consumed. The
plan is to promote further energy saving through effective utilization of thedemand monitors.
Also, in consideration of this power supply situations, the Koka plant carried out areplacement of 200 lamps by energy-saving type fluorescent lamps in thesummer of 2011. As a result, it could achieve a reduction in power consumptionof 41,975 kWh/year. Moreover, a reduction in power consumption of 61,320
kWh/year was additionally accomplished by eliminating 234 fluorescent lamp
units by thinning out their locations.

Copyright 2012 © HOYA CORPORATION

Occupational Safety and Health
HOYA works to create a comfortable environment where every employee can work safely andin good health, both to support a meaningful life plan for employees and ensure the lastingdevelopment of the Company.

Administrative structure for the Group-wide Occupational Safety and Health
In 1995, the HOYA Group formulated its Occupational Safety and Health (OSH)
Principles and Basic Policy, under which the Group promotes its OSH activities at
its facilities throughout Japan and overseas. In October 2008 the Company
integrated its environmental protection and occupational safety and healthsystems. Environmental protection and occupational safety and health activities
are now carried out under a new system headed up by the HOYA Group Director
for Environmental Protection, Occupational Safety and Health.

Safety Activities
Establishing an Occupational Safety and Health Management System
To ensure the safety and health of its employees, HOYA has established an
occupational safety and health management system based on the Occupational
Health and Safety Assessment Series (OHSAS) 18001 standards. As of March
31, 2012, 8 facilities in Japan and 28 facilities in 18 countries overseas have beencertified by OHSAS 18001, a process that began in March 2002.

Initiatives to Utilize Risk Assessments in Reducing Risk
Along with the rising popularity of OHSAS18001 certification, the Company
issued the HOYA Group Risk Management Guidelines for Occupational Safety
and Health in November 2009. This guideline has since been used to bring morecohesion to the risk assessments among facilities, and to focus on safetymeasures based on hierarchy of risk reduction measures.

Measures to Ensure Machinery and Equipment Safety
In April 2005, with the aim of preventing accidents related to operating machineryand equipment, the HOYA Group Machinery Safety Standard was issued. Within
the field of occupational safety measures, HOYA has placed utmost priority on
the implementation of risk reduction measures for machinery and equipment rightfrom the design stage.

Implementing Occupational Safety and Health Audits
To improve and enhance the performance of occupational safety and healthsystems, audits are conducted on a regular basis at facilities in Japan andoverseas by a director and staff of the HOYA Group Environmental Protection
and occupational safety and health. Measures are in place for implementing theirproviding advice and guidance with regard to legal compliance, improving safety
and health performance.

Implementing Occupational Safety and
Health Audits

Implementing Safety Education for the HOYA GroupHOYA holds meetings with occupational safety and health staff in Japan andoverseas and provides consulting within the group to share information andimprove skills on issues pertaining to the occupational safety and health.
Currently, meetings of the persons in charge of environmental protection andoccupational safety and health for each Division are held around three times ayear and HOYA Group foreman training is held twice a year.
Consulting on the subject matter within the group is provided mainly to thebusiness bases overseas. Each of these activities contributes to raising the levelof safety at the HOYA Group.
Implementing Safety Education for the
HOYA Group

Copyright 2012 © HOYA CORPORATIONCorporate Governance
HOYA promotes management with the aim of maximizing its corporate value basedon the recognition that corporate governance is a matter of utmost importance formanagement.
As the basis of taking a fair approach to stakeholders, we have adopted a“company with committees” structure simultaneously with the revision of theCompanies Act, which enables us to better distinguish the execution andsupervision of management to prevent management from being conducted based
solely on in-house logic. We have also set forth in the Articles of Incorporation thatthe majority of Directors consist of Outside 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 and responsibility for the execution of operations, inorder to accelerate decision making and improve management efficiency.

“Company with Committees” Structure
HOYA corporation employs a “company-with-committees” management system,
which was created as a result of a legislative amendment in June 2003. Under the“company — with - committees” management system, by giving executive officers
authority to manage business, business decision makings are accelerated. At thesame time, three committees - the Nomination Committee, the Compensation
Committee and the Audit Committee - were established, with a majority of themembers being outside directors (at HOYA, the committees are composed
exclusively of outside directors), to ensure the effectiveness of management
supervision by the Board of Directors. Adopting the “company-with-committees”
management system enables us to clearly separate the execution and supervisionof corporate management, whereas this was not possible with the previous“company-with-auditors” system. Through this system, we aim to ensure efficientmanagement and improve the overall soundness and transparency of management.
Governance Structure

Board of Directors
HOYA's Board of Directors, in which Outside Directors comprise the majority ofBoard members (7 Directors, consisting of 5 Outside and 2 Internal Directors as ofJune 20, 2012), convene regular Board meetings 10 times a year as a general rule.
Each meeting of the Board of Directors involves lively discussions and deliberations
in a solemn atmosphere, with globally-minded Outside Directors with a wealth ofmanagement experience supervising the execution of operations by Executive

Officers and providing them with advice from various angles. Also at the meetings,
besides approving major business plans, a detailed information is provided tooutside directors through means such as presentations by division managers
regarding products and the competitive environment.

Executive Officers
At HOYA, three persons - namely, the Chief Executive Officer (CEO), Chief
Financial Officer (CFO) and Executive Officer in charge of Technology - arenominated by the Nomination Committee as candidates for Executive Officers andelected at the meeting of the Board of Directors as of June 20, 2012 (CEO and CFO
concurrently serve as Internal Directors). Each of them oversees the execution ofoperations in their respective jurisdictions determined by the Board of Directors, andcarry out decision-making in a speedy fashion. Respective persons responsible forbusiness divisions are instructed by the Executive Officers to formulate and executespecific policies based on the management policies decided at the meetings of theBoard of Directors, and report the progress of businesses at the business reporting
meetings, which are held more or less each month.

Committees
The Board of Directors has internal organizations, namely, “Nomination
Committee”, “Compensation Committee” and “Audit Committee”, each of which
consists solely of Outside Directors.
Nomination Committee

The Nomination Committee, which is comprised of 5 Outside Directors, selects
candidates for Directors based on the “Basis for Election of Candidates for
Directors” and proposes the candidates to the General Meeting of Shareholders forvoting. It also selects candidates for Executive Officers and the Representative
Executive Officer, and proposes the candidates to the Board of Directors for voting.
As necessary, it makes decisions to propose the dismissal of Directors to theGeneral Meeting of Shareholders and the dismissal of Executive Officers to theBoard of Directors for voting.

●Basis for Election of Candidate for Directors (Outline)
Those with appropriate personalities and insights as director and with no healthproblems in performing their duties. With regards to internal director candidates,
they must have a high level of specialized knowledge in our business, excellent
business decision-making ability and business execution ability, and excellent
leadership, decision-making, analytical, forward-thinking and policymaking skills.
Regarding candidates for outside directors, they must have extensive experience asbusiness managers or be in positions as professionals in law, accounting, financeor similar fields. They must not have significant interests in the HOYA Group, beable to maintain their independence and participate in at least 75% of HOYA
Group's board meetings.

●Criteria for Independence of Candidates for Directors
The Committee sets out the criteria for independence of candidates for Directors,
which is stricter than the rules by Tokyo Stock Exchange so that a function ofoverseeing Executive Officers required to outside Directors is secured.

To ensure the independence of candidates for outside directors, candidates must
not fall under any of the categories below.
<Those related to the HOYA Group>・ Those who previously worked for the HOYA Group・ Those who have a family member (spouse, child or blood relatives or in-laws up
to the second degree) who have held the position of a director, executive officer,
auditor or management employee in the past 5 years.
<Those related to a big business partner>
・ Those who are operating officers, executive officers or employees of HOYA
Group's important clients who make up 2% or more of HOYA's consolidated sales
in the past 3 consecutive years; or if the HOYA Group is an important client who
makes up 2% or more of the consolidated sales of the candidate's enterprise groupin the past 3 consecutive years.
<Those who provide professional services (lawyers, chartered accountants,
certified tax accountants, patent attorneys, judicial scriveners and those insimilar professions.)>・ Those who have received remuneration of JPY5 million or more per year from the
HOYA Group in the past two years.
<Other categories>
・ When directors are mutually dispatched between HOYA and othercompanies/organizations
・ If the candidate's company has any other important interests within the HOYA
Group
Compensation Committee

The Compensation Committee, which is comprised of 5 Outside Directors, builds a
remuneration structure that gives more incentives to Directors and Executive
Officers and assesses their work in an appropriate manner, with the aim to help
improve HOYA's business performance. The Compensation Committee determines
the remuneration of Directors and Executive Officers on an individual basis inaccordance with the following policies.

●Remuneration etc. for the Director of the Company(i) Basic Policy
The Company has established a Compensation Committee with the objective of“contributing to improvement of results of the Company by constructing a
remuneration system that raises motivation among Directors and Executive Officers
and by appraising their performance appropriately.” The Committee is made up of
all of 5 Outside Directors who are not Executive Officers of the Company.
(ii) Policy concerning remuneration for Directors
The remuneration of Directors consists of a fixed salary and stock options.
The fixed salaries consist of a basic compensation and compensation for being amember or a chairman 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 the levels set by other companies as
determined by a survey conducted by an outside professional organization.
(iii) Policy concerning remuneration for Executive Officers
The remuneration of Executive Officers consists of a fixed salary, performancebased compensation and stock options.
Fixed salaries are set appropriately according to the office and responsibility ofeach Executive Officer (President, CEO, etc.) and by taking into consideration suchfactors as the Company's business environment and the levels set by othercompanies as determined by a survey conducted by an outside professionalorganization.
Performance-based compensation is determined by both financial performance,measured as the percentage of targets met with respect to indicators corresponding
to sales, profit for the year and earnings per share according to Japanese GAAP,
which is given an 80% weight, and the degree of achievement with respect tomanagement measures set at the beginning of the fiscal year, which is given a 20%
weight. Remuneration typically consists of 50% fixed salary and 50% performancebased pay. The performance-based portion, however, can fluctuate widely,depending on the Company's performance.
Benefits granted to expatriates (such as housing) are also set at appropriate levels
in consideration of the Company's business environment and the levels set by othercompanies as determined by a survey conducted by an outside professionalorganization.
(iv) Stock Options
In order for newly-appointed Directors and Executive Officers to share the same
perspective as shareholders in regards to share price, and for re-appointed to sharecommon interest with shareholders on long-term basis, commensurate stock
options, which are a certain percentage of the granted shares when newlyappointed, are granted continuously every year in consideration of the exercise
price at the time of granting (a market price one day prior to a Board of Directors
resolution regarding stock option grants), fluctuations in the share price during theexercise period and fixed annual salaries.
Based on the above, the number of stock options granted to Outside Directors isfixed each year, whereas the number of stock options granted to Executive Officers
is based on Company performance and individuals' evaluations, subject todeliberation by the Compensation Committee and decided by the Board of
Directors.
Retirement benefits for officers were eliminated in 2003 as it was determined thatthese benefits were essentially a service pay for many years of service and had
little to do with Company's performance or shareholder returns, and as such are notappropriate as a component of the officer compensation scheme.
Total amount of remuneration, etc. of Directors and Executive Officers for the fiscal
year ended March 2012.
Total amount of remuneration by
NumberClassificationof(payees)

OutsideDirectors

Internal

Total

Executive officers

Total

6
persons3
persons9
persons4
persons10
persons

Total amount

type

of
(remuneration,etc.)

59 millions

24 millions

83 millions

275 millions

358 millions

Fixedsalary51
millions
24
millions
75
millions
184
millions
258
millions

Performance
based
remuneration

-

-

-

43 millions

43 millions

Stock
option8
millions-

8
millions48
millions
56
millions

Note 1.At the end of the fiscal year under review, there were eight Directors and four Executive Officers. Three ofthe four Executive Officers served concurrently as internal Directors.
Note 2.The total amount of remuneration includes remuneration paid to one Executive Officer who retired as of
the conclusion of the 73rd Ordinary General Meeting of Shareholders.

●Overview of Liability Limitation Contract
The Company and its Outside Directors have concluded an agreement that limits
possible future liabilities of the latter prescribed in the first paragraph, Article 423 of
the Companies Act to the higher of a prefixed amount exceeding 10 million yen or
the amount prescribed by the Act.
Audit Committee

The Audit Committee, which is comprised of 5 Outside Directors, formulates theaudit policies and audit plans for each fiscal year, and verifies financial statements,
etc. based on the quarterly reports and year-end reports received from the
Independent Auditor according to such policies and plans. It also interviews theInternal Audit Division to obtain the results of operational audits, and verifies thesoundness, legality, efficiency, etc. of management. All important matters arereported to the Board of Directors, and countermeasures are taken as necessary.

Internal Control System
In addition to striving to further strengthen corporate governance, the HOYA also
works toward the development of sound internal control systems with the objectiveof ensuring appropriate and efficient business management. Each business divisionand facility develops and improves the control environment, evaluates andresponds to risk, and verifies and improves the control processes to ensure that thecontrol systems that operate within each division and facility are the mostappropriate for their operating environment. The head of each business division has
managerial authority and is responsible for improving the business results. Eachhead is also obligated to seek to further improve internal control systems, with theobjectives of maintaining compliance, effectiveness and efficiency of work practices,
the reliability of financial reporting and the integrity of management assets. The
Audit Department at HOYA Global Headquarters is responsible for the regular
auditing and verification of administrative processes for each division and businessoffice from an independent standpoint. It conducts operational audits, checks thatinternal control systems are functioning as they should, ensures that there is no
dishonesty, and checks for areas for potential improvement. Problems that come tolight as a result of audit procedures become the subject of a recommendation forimprovement. Particularly important matters are reported to the Audit Committee
and the Board of Directors, as well as to the executive officers. The executive
officers decide upon and issue directives for speedy, appropriate responses.
Frameworks and Policies Concerning Internal Control Systems① System for Ensuring Adequacy of Operations:Contents of the resolutions the Board of Directors of the Company made withregard to internal control systems set out in (b) and (e) of first item, first paragraph,
Article 416 of the Companies Act and Article 112 of the Ordinance for Enforcementof the Companies Act are as follows:(1) Important matters in the execution of duties by the Audit Committee(i) Matters concerning Directors and employees assisting the Audit Committee in its
duties•

The Audit Committee Office shall be established to assist the Audit

Committee in its duties.
(ii) Matters concerning independence from the Executive Officers of Directors andemployees stated in the above item•

The regulations of the Company shall prescribe that the Audit Committee has

the power to appoint and dismiss staff members of the Audit Committee Office.
(iii) Systems required for reports to the Audit Committee, including reports by
Executive Officers and employees•

The Board of Directors Regulations were amended to require reporting of allimportant matters to the Board of Directors, where Outside Directors comprisethe majority of Board members.
As a result, reports to the Board of Directors began to cover all importantmatters. For this reason, no special stipulations are established regarding
matters that need to be reported to the Audit Committee.
(iv) Other systems to ensure the effectiveness of audits by the Audit Committee• The Company shall position the Internal Audit Division under the Audit
Committee. The Internal Audit Division shall conduct audits focusing on onsite
audits according to the audit policies and plans adopted or approved by the Audit
Committee, and shall report to the Audit Committee as the occasion demands.
• Each internal organization shall promptly report information it retains or
manages at the request of the Audit Committee or the Internal Audit Division.
(2) Matters required for ensuring the adequacy of operations(i) Systems concerning the storage and management of information about theexecution of duties by Executive Officers•

Efforts shall be made to adequately store and manage important matters,

including documents, records and minutes relating to applications for internal
approval, in accordance with laws, regulations and other standards.
(ii) Regulations and other systems concerning the management of the risk of loss
• Each organ and division shall try to identify and manage risks, and shall aim
for improvements as the occasion demands, taking into consideration the
instructions of the Internal Audit Division, etc.
(iii) Systems for ensuring the efficiency of duty performance by Executive Officers• Each division shall carry out its operations according to the annual plan andthe quarterly budget adopted at meetings of the Board of Directors.
The HOYA Group shall ensure the efficiency of Group management by
evaluating the levels of target achievement every quarter and working to make
improvements as the occasion demands.
• Executive Officers shall be timely and precise in performing their duties basedon the decision-making system for their execution of duties, which covers theirstandards for approving important matters.
(iv) Systems for ensuring compliance with laws, ordinances and the Articles ofIncorporation of the way duties are performed by Executive Officers and employees• The HOYA Group shall secure systems relating to the HOYA BusinessConduct Guidelines that need to be observed by Directors and employees of the
HOYA Group.
(v) Systems for ensuring the adequacy of Group operations, including a given
company, its parent and its subsidiaries• The HOYA Group shall observe across its organization the HOYA BusinessConduct Guidelines established based on the Management Policy andManagement Principles of the Group, and shall undertake educational activities
as required. The HOYA Group will reinforce the effectiveness of such activities
with the HOYA Help Line, an intra-Group system for reporting and counseling.

The Group shall operate this system not only in Japan but also overseas toensure the soundness of Group activities.
(3) System for ensuring reliability of financial reporting
The HOYA Group shall establish and manage a system of internal controls forfinancial reporting and build a system for evaluating its financial reporting to ensure
the reliability of its financial reporting and valid, appropriate submission of internal
control reports as prescribed in the Financial Instruments and Exchange Act.
② Basic Policy for Eliminating Antisocial Forces
A meeting of the Board of Directors resolved to adopt the following basic policy forthe elimination of antisocial forces.
We shall have no association whatsoever with antisocial forces, and deal withundue claims made by such forces resolutely as an organization in cooperation withspecialized external agencies.
Basic Policy on Parties that Control Decisions Concerning Corporate Financeand Business Policies

The Company does not have a specific basic policy in this regard. However, theCompany's basic view is as follows: The Company takes the view that judgment
should ultimately lie with shareholders when an acquisition proposal and the like ismade with the transfer of management control as its objective. No concrete threat
regarding acquisition has emerged so far. The Company has no intention to fix
concrete arrangements (so-called “countermeasures against takeovers”) before theemergence of any such proposal. The responsibility of management is not to takeunnecessary actions to defend companies from takeovers. As an entity that
operates for the benefit of its shareholders, the Company considers it crucial toincrease the return of profit to shareholders and increase its corporate value by
constantly monitoring transactions of its shares and changes to its shareholders, toimprove its business performance and increase its financial strength with thegreater objective of achieving further growth.
If an acquisition or similar proposal is made, the Company considers it important toprovide the information shareholders require to make a judgment based on an
examination of the proposal made by the proposer. If the Company believes thatthe proposal will not increase the corporate value of the Company and benefit thecommon interest of its shareholders, it will clearly explain to the shareholders thereasons that form the background to its position, and try to obtain the understandingof shareholders.
Business Conduct Guidelines

To achieve the best results from internal control systems, it is essential that all
employees performing duties for an organization work to foster greater awareness.
HOYA has established a set of Business Conduct Guidelines that clarify the guiding
principles under which each employee should perform his or her duties, withresolute adherence to professional ethics. The Group also conducts a wide range of
employee education activities to foster awareness of regulations and rules.
HOYA Help Line

In 2003 the Company implemented another initiative, the HOYA Help Line, as aninternal reporting and consultation system for the Group. If there is an act that
contravenes the law or the HOYA Business Conduct Guidelines, the HOYA Help
Line is intended to enable early identification of the problem and quick reporting to
top management, while protecting the informer, which enables timely andappropriate action to be taken on the issue. This system helps to preserve theintegrity of the HOYA Group as a whole. The HOYA Help Line has two types ofpoints of contact; one is “HHL” a dedicated section within the Company's
headquarters and the other is an outside legal counsel. The system is designed topreserve anonymity and works to maintain the system’s functional effectiveness. As

of March 2012, the system is in place at Group companies in Japan, North America(the United States and Canada), Thailand, European countries, Philippines,
Singapore, Australia and Malaysia, and operates in accordance with businesspractice and laws of each country. We continue to expand the number of countries
covered, giving the HOYA Help Line worldwide coverage.

Full Disclosure and Investor Relations Activities
HOYA considers fair and prompt disclosure of information and other investor
relations activities to be a fundamental duty of management. The Company also
values communication with shareholders,and it continues to clearly reflect theirviews in its management practices. In 1998, HOYA started quarterly disclosure offinancial statements, ahead of many other Japanese firms. Since then the Company
has sought to increase the timeliness and broaden the scope of disclosure byshortening the period between the account settlement at the end of each quarterand the disclosure, and ensuring that the volume of information in the quarterly
reports is equivalent to that in the year-end financial reports. Top management is
actively involved in investor relations activities. For example, the CEO attends every
quarterly investor meetings to explain results and answer questions from securities
analysts and institutional investors.

Copyright 2012 © HOYA CORPORATIONBoard of Directors
Board of Directors (As of June 20, 2012)
Outside directors

Yuzaburo Mogi
Apr.1958

Joined Noda Shoyu Co., Ltd. (present Kikkoman Corporation)

Mar.1979

Director of Kikkoman Corporation

Mar.1982

Managing Director of Kikkoman Corporation

Oct.1985

Managing Director and Representative Director of Kikkoman Corporation

Mar.1989

Executive Managing Director and Representative Director of Kikkoman Corporation

Mar.1994

Executive Vice President and Representative Director of Kikkoman Corporation

Feb.1995

President and Representative Director of Kikkoman Corporation

Jun.2001

Director of the Company (present post)

Jun.2004

Representative Director, Chairman and CEO of Kikkoman Corporation

Jun.2011

Honorary CEO, Chairman of the Board of Kikkoman Corporation (present post)

Eiko Kono
Dec.1969

Joined RECRUIT Co., Ltd.

Apr.1984

Director of RECRUIT Co., Ltd.

Aug.1985

Managing Director of RECRUIT Co., Ltd.

Nov.1986

Senior Managing Director of RECRUIT Co., Ltd.

Jul.1994

Executive Vice President of RECRUIT Co., Ltd.

Jun.1997

President and Representative Director of RECRUIT Co.,Ltd.

Jun.2003

Director of the Company (present post)

Jun.2003

Chairperson and CEO of RECRUIT Co., Ltd.

Apr.2004

Chairperson and Chairperson of the Board of Directors of RECRUIT Co., Ltd.

Jun.2005

Special Advisor of RECRUIT Co., Ltd.

Yukiharu Kodama
Apr.1957

Joined the Ministry of International Trade and Industry (MITI) (now the Ministry of Economy, Trade andIndustry (METI))

Jun.1985

Director General of the Minister's Secretariat MITI

Jun.1988

Director General of Industrial Policy Bureau MITI

Jun.1989

Administrative Vice-Minister of MITI.

Jun.1991

Retired from MITI

Jun.1991

Advisor to Japan Industrial Policy Research Institute(JIPRI)

Feb.1992

Advisor to the Industrial Bank of Japan (IBJ)

Jun.1993

President of The Shoko Chukin Bank

Jul.2001

Chairman of the Japan Information Processing Development Corporation (present post)

Jun.2005

Director of the Company (present post)

Nov.2007

Chairman of the Mechanical Social Systems Foundation

Apr.2012

Chairman of the Mechanical Social Systems Foundation (present post)

Itaru Koeda
Apr.1965

Joined Nissan Motor Co., Ltd.

Jun.1993

Director of Nissan Motor Co., Ltd.

May.1998

Managing Director of Nissan Motor Co., Ltd.

May.1999

Vice President of Nissan Motor Co., Ltd.

Apr.2003

Representative Director of Nissan Motor Co., Ltd.

Jun.2003

Co-Chairman of Nissan Motor Co., Ltd.

Jun.2003

Chairman of Calsonic Kansei Corporation

Jul.2003

Director of Renault S.A

Mar.2005

President of JATCO Ltd

Jun.2008

Chairman Emeritus and Advisor of Nissan Motor Co., Ltd. (present post)

Jun.2008

Chairman Emeritus and Advisor of Nissan Motor Co., Ltd.

Jun.2009

Director of the Company (present post)

Yutaka Aso
Nov.1973

Joined Osawa Shokai (presently J. Osawa Group Co., Ltd.)

May.1975

Auditor of Aso Cement Co., Ltd. (present Aso Corporation)

Jun.1977

Senior Managing Director of Aso Cement Co., Ltd.

Dec.1979

President of Aso Cement Co., Ltd.

Aug.2001

President and Representative Director of Aso Cement Co.,Ltd.

Aug.2001(present LAFARGE ASO CEMENT Co., Ltd.) (present post)

Jun.2010

Chairman and Representative Director of Aso Corporation (present post)

Jun.2011

Director of the Company (present post)

Internal Directors

Hiroshi Suzuki
Apr.1985

Joined the Company

May.1993

President of HOYA Corporation USA

Jun.1993

Director of the Company

Jun.1997

Managing Director of the Company

Apr.1999

President, Electro Optics Company

Jun.1999

Executive Managing Director of the Company

Jun.2000

President and Representative Director of the Company

Jun.2003

Director, President, Representative Executive Officer and CEO of the Company (present post)

Dec.2011

Chief Representative of Singapore Branch of the Company (present post)

Kenji Ema

Copyright 2012 © HOYA CORPORATION

Mar.1970

Joined the Company

Jun.1993

Director of the Company, in charge of Administration Planning, Accounting and PurchaseJun.1997

Managing Director of the Company, in charge of Strategy, Planning and Treasury

Jun.2000

Executive Managing Director of the Company, in charge of Corporate FinanceJun.2001

Executive Managing Director and CFO of the Company

Jun.2003

Director, Executive Officer and CFO of the Company (present post)

Jul.2003

President of HOYA HOLDINGS N.V.

Jan.2007

Executive Officer Chief Financial of Netherlands Branch of the Company

Dec.2011

Executive Officer Chief Financial of Netherlands Branch of the Company (renomination, present post)

Comments from Outside Directors
Outside Directors Help Steer the Ship With a Senseof Ownership
Outside Director, Chairman of the Compensation Committee, member ofNomination Committee and member of Audit Committee

Eiko Kono(Formerly, Special Advisor to RECRUIT Co., Ltd.)I chose to accept the position of outside director at HOYA Corporation because I
was impressed by what CEO Suzuki told me the first time I met him. He said, “It
is not me making this request; the other outside directors say we want Ms. Kono.”At the time, the position of outside director itself was not very common. So I
perceived a great deal of discipline with regard to governance in the fact that thecompany was choosing a new outside director not by calling on personalacquaintances but by following the recommendation of the other outside
directors.
And when I actually took up the position, there were other things that impressedme as well. The same is true today, but all the outside directors, myself included,
were either corporate executives or former executives. I think this is extremelyrare in Japan. There are companies with attorneys or certified public accountants
as outside directors, but HOYA has put priority on capabilities that are inherently
possessed by executives with hard-won experience on the frontlines of corporate
management. The five current outside directors have vast and diverse experienceand knowledge that is brought to bear in overseeing and assessing management.
I feel the company's governance system truly meets global standards.
What particularly strikes me on a regular basis is the fact that the outside
members survey management from every conceivable angle with a sense ofownership. The members offer various opinions within the scope of theirknowledge as a matter of course, but they also take the discussion to anotherlevel by debating whether the best practices of other companies are being
effectively incorporated and at times whether research and development isheading in the right direction. This approach is the natural result of every outside
director engaging in the job as if they themselves were managing HOYA.
The days of Japanese companies experiencing soaring growth like they used toare for the most part over. Emerging countries are catching up and the strong yen
is producing a headwind, so not even all of HOYA's businesses are necessarily
performing well. This is precisely the reason why clarifying and openly discussing
problems is so important. HOYA's Board of Directors meetings take place in an
exceptionally open and fair atmosphere. Problems are put on the table without
reservation and discussed with all due seriousness. This ensures that problems
even in businesses that are not in good shape are brought to the attention of theBoard and not concealed by executives. In this sense, the process I think reflects
the fact that the internal directors (executives) really understand the point ofgovernance.
From my perspective as an outside director, one of the tasks facing HOYA isdevelopment of human resources. It could be said that the main mission of
corporate executives is to train the next set of executives. Internal personnel
development is important, but the most significant challenge is how to actively

bring in capable people from also outside the company and how to develop
exceptional people for the next generation of HOYA's growth.
I believe that the role of corporate executives is to advance the organization andmaximize corporate value. As an outside director, I intend to contribute to thefurther growth of HOYA with the same aspiration.
I would ask shareholders to also continue closely tracking HOYA's growth going
forward.
July 2012
Outside Director and Chairman of the Compensation Committee

Eiko Kono

Dynamic Board of Directors Symbolic of HOYA's
Energetic Corporate Culture
Outside Director, Chairman of the Nomination Committee, member ofCompensation Committee and member of Audit Committee

Yuzaburo Mogi

(Honorary CEO, Chairman of the Board of

Kikkoman Corporation)
I began serving as an outside director for HOYA Corporation in 2001. I wasaware of HOYA and its products prior to that, but I remember when I was
appointed listening to a presentation on the company and thinking it to be truly
exceptional. HOYA is characterized by its outstanding profit margins. This meansnone other than HOYA's strategy of concentrating resources in areas where it
excels and capturing large market is a successful strategy. At the time, this wasquite a discovery for me.
I also remember thinking that the atmosphere surrounding the Board of Directors
was cheerful and optimistic.
HOYA board meetings start at 9:00 in the morning and sometimes run until
around 1:00 in the afternoon. Although the meetings can be long, serious
discussion and debate always takes place throughout. The meetings are very
dynamic and conducted in an atmosphere that is never brutal, but always
cheerful. When an important agenda such as an M&A is discussed, the opinions
of directors often clash, but the same convivial atmosphere prevails.
HOYA's executive officers work quite hard so that they represent this kind of
corporate culture. For corporate management to function the people at the top
must work hard. I think HOYA is a company that lives by this ironclad rule.
Globalization remains a major issue not only for HOYA but for Japanesecompanies in general. In HOYA's case, from CEO Suzuki on down, executive
officers have extensive experience overseas, global perspective and a firm graspof international business. In fact, HOYA was among the first in Japan todeliberately expand overseas, and has established a large number of businessstrongholds outside Japan. I have a lot to look forward to because expansion in
HOYA's global operations can only accelerate.
I'm also attracted in particular to HOYA's Life Care segment which includes
products related to eye care and medical care. Businesses promoting health will
no doubt experience major growth globally, including in emerging markets, andso I expect will HOYA's Life Care segment going forward. Medical businesses are
involved in none other than human life, and technological capability is extremelyimportant. On this point, HOYA has proprietary technologies and it continues torefine them.
Our expected role as outside directors is to monitor the proper management
conduct of executive officers from a perspective that differs from the internalmanagement team. For this reason I feel it's important to ask tough questions atboard meetings without reservation.
I sense even from a long-term perspective that HOYA is a company with a great
future. I sincerely ask that shareholders also take a long-term view in theirguidance and support of HOYA.
July 2011
Outside Director and Chairman of the Nomination Committee

Yuzaburo Mogi

As outside director, I am committed to fulfilling myresponsibility to ensure that appropriate
management decisions are made at HOYA.
Outside Director, member of the Nomination Committee, member ofCompensation Committee and member of Audit Committee

Itaru Koeda(Chairman Emeritus and Advisor of Nissan Motor Co.,Ltd.)
I was newly appointed as an outside director of HOYA at the Ordinary General
Meeting of Shareholders in June 2009. Prior to assuming this position, I wasaware of HOYA's eyeglass lens business, the merger with PENTAX, and theCompany's high profits. Once I began participating in management, however, I
truly came to understand how different HOYA is from the automotive company
format where I spent so many years working. Unlike the auto industry, where acompany is focused on developing and manufacturing a single type of end
product, HOYA covers an extremely broad range of businesses, from the Group's
high-tech parts and materials to eyeglass lenses and medical-related products—
the sum of all these varied parts is the company we know as HOYA. Within thebusiness, authority and responsibility is distributed broadly, from executive
officers to business divisions, resulting in a truly efficient underlying management
structure in which division systems are firmly in place.
Looking back over fiscal 2010 from my perspective as an outside director, themost striking aspect of HOYA's management is the substantial debate at
meetings of the Board of Directors. At each meeting, the five outside directors
from different backgrounds took time to ask perceptive questions based on theirwealth of knowledge and experience. In terms of execution, based on the conceptof portfolio management, decision-making about the allocation of management
resources was dynamic and timely.
In this type of corporate entity, I believe that stakeholders look to outside directors
such as myself to act as a safety valve to check whether management decisions
are correct from the perspectives of societal common sense. At the same time,
having come from an automotive company where brand value has a major impact
on sales, I feel it is of great importance in conducting oversight of management toconsider whether any individual business activities may be damaging the value ofthe overall HOYA brand. HOYA already has strong brand value, and as I continue
my duties as outside director I am committed to fulfilling my responsibility toensure that appropriate management decisions are made to further enhance thatvalue.
The market environment remains severe, still reverberating from the impact of theLehman shock. Under these conditions, simultaneously managing multiple
businesses of different types is a difficult task, but I believe that HOYA's four
executive officers (three of whom are also internal directors) are doing a fine jobof assigning responsibilities in a balanced manner and steering the Company
ahead. Going forward, I anticipate that they will wield HOYA's brand power based
as it is on the Company's unrivalled dynamism, first-rate specialist abilities andthe reliability of HOYA quality and technologies, to achieve further growth.
I hope that all shareholders will continue to watch over HOYA's business with anunderstanding of its great future potential.
July 2010*
Outside Director

Itaru Koeda* The comment was given when he finished the first year as Outside Director of
the Company.

Copyright 2012 © HOYA CORPORATION

Activity Highlights
2011
June 16

HOYA establishes a new plant for melting optical glass inShandong, China
In the digital camera and optical glass market, continued industry
accumulation and growth of demand are expected especially in developing
countries, mainly in China.In addition, the close relationship with resource
countries, mainly China is of growing importance in raw procurement.
Under the above circumstances, the Company decided to build a new
production base in China, to manufacture such high-function and highquality optical glasses, and offer to the customers keeping close relationshipwith the market.
Read more→
July 15HOYA establishes a new plant for producing mask blanks
in Singapore
The Company newly builds a next-generation production line to meet quality
requirements of advanced mask blanks for semiconductor manufacturing, of
which demand is expected to grow in the future. With this, the Company
diversifies its facilities taking strengthening of Business Continuity Plan into
considration.
Read more→
July 22HOYA opens first office in China for flexible endoscopebusiness to strengthen healthcare delivery in China
PENTAX Lifecare, HOYA Corporation's flexible endoscope business divisionannounced today that it opened a legal entity and office in Shanghai, China
on July 5. This will mark a significant advance into the Chinese medical
equipment market.
Read more→
October

1

HOYA announces closing of sale of the PENTAX imaging
systems business
HOYA Corporation (“HOYA”) announced today that HOYA executed
corporate split agreement and the transfer agreement, as released “Sales of
the PENTAX Imaging Systems Business” on July 1, 2011 and “ Notice ofPartial Modification and Execution of the Corporation of the Corporate Split(Kyushu bunkatsu) Agreement (Progress report)” on August 10, 2011. As theresult, HOYA succeeded the PENTAX Imaging Systems Business to Ricoh
Company, Ltd.
Read more→

Future image of optical glass plantin China

2012
Mar 30PENTAX Lifecare expands its R&D capabilities in Germany
PENTAX Lifecare, a division of HOYA Corporation, today announced theacquisition of Digital Endoscopy GmbH, which will expand PENTAX's global
R&D capabilities. Based in Friedberg, Bavaria, center of Germany's medical
technology frontier, Digital Endoscopy develops innovative endoscopic imaging
products with expertise in software-based computer architecture and optical
illumination technologies.

Members of Digital Endoscopy
GmbH

Read more→
Apr

2

HOYA Lens Thailand re-opens its doors
AYUTTHAYA — Six months after the closing in October 2011, caused by theworst flooding to hit Thailand in decades, HOYA Lens Thailand Limited has reopened its manufacturing facility in Ayutthaya according to plan. HOYA starts
production with limited volumes of prescription lenses [Rx] which will increaseprogressively on a monthly basis.
Read more→

Apr

HOYA Lens Thailand, Ltd.
Ayutthaya Plant

3

HOYA Vision Care expands its direct presence in Brazil
HOYA Corporation's Vision Care Division, a key player in the global market for
ophthalmic lenses, today announced the acquisition of Optotal HOYA S.A., its
exclusive partner in Brazil. Optotal operates the largest prescription lens (Rx)laboratory and one of the largest wholesale distribution networks in theophthalmic lens market in Brazil.
Read more→
Apr 10

Basic agreement in the field of eyewear business aiming topromote the Japanese distinctive brand and opticaltechnologies worldwide
HOYA Corporation (“HOYA”) and Seiko Epson Corporation (“Epson”) today
came to a basic agreement to begin discussions on transfer of Epson's eyeglasslens development and manufacturing business to HOYA.
Read more→

Copyright 2012 © HOYA CORPORATION

Optotal HOYA

CEO Message
HOYA has built a powerful, resilient businessstructure in the face of unexpected changes. We will
utilize this structure to further develop a portfolio for
future growth.
President and CEO

Hiroshi Suzuki

The fiscal year ended March 2012 was marked by an unprecedented series of
events and circumstances--the Great East Japan Earthquake of March 11,
disastrous flooding in Thailand, sharp yen appreciation, skyrocketing prices
associated with China's restrictions on rare earth exports, and changes in thesemiconductor market environment. All had a significant and undeniably
adverse impact on Japan's economy and industry.
HOYA was also impacted considerably, so I do not believe that our financial
performance was satisfactory from the standpoint of shareholders. However,with the exception of these transient factors, we were able to reinforce the basic
structure of our businesses and add more muscle. This allowed us to capture
market share and revenue in Information Technology and accelerate growth byfocusing management resources on Life Care. It was therefore also a year ofsteady progress in portfolio management. Of course we will be flexible intransforming business portfolios as times change, and are aware of the need inthis era of rapid change for making prompt revisions to our portfolio.
Reviewing the past year with this in mind, I will provide an overview of the year
and report on prospects for the future.

Initiatives and Achievements: Review of Fiscal 2012
With markets growing more competitive, in the Information Technology field we
identified and focused on priority businesses. These efforts bore fruit as weleveraged our competitive technical capacities to generate relatively stablerevenues in face of the prevailing headwind of yen appreciation and rising raw
material costs.
In the area of mask blanks for semiconductor production, we are producing
stable revenues while maintaining overwhelming market share. In the year
under review, we strengthened customer relations by promoting development
more in line with the specific needs of individual customers. Glass memory
disks for hard disk drives made further progress in the market as we launchedproduction of cutting-edge products with 500 GB per platter capacity ahead ofother companies. Optical lenses rode a tailwind of rapidly growing demand forcompact SLR cameras (mirrorless) that increased the need for high-quality
lenses with high zoom power. This led to an increase in orders for asphericalglass molded lenses, a HOYA specialty. By contrast, the Photomask businesssaw conditions deteriorate from a continued fall in product prices andappreciation of the yen, despite the attainment of considerable sales volume
growth in mainly advanced, high-precision products.
The PENTAX camera business achieved profitability after a long fight and wassold. We are happy that our former colleagues will be taking on the challenge ofa new stage of growth.
The performance of the Life Care field was hampered substantially by floodingin Thailand. If this impact is excluded, we were able to generate healthy growthby investing resources on a strategic basis. Endoscopes for medical use andeyeglass lenses experienced conspicuous growth in emerging markets, while
contact lenses and intraocular lenses enjoyed steady expansion in the domestic
market.
In the eyeglasses lens business, supplies mainly to Japan and Europe were
temporary halted due to the flooding in Thailand in October, 2011, which
resulted in substantial inconvenience for many customers. I would like to takethis opportunity to again offer my sincere apologies. In April 2012 operations
have started again at plants that had been flooded, and every effort is being
made to restore supply volume to previous levels. We plan to return production
capacity to pre-flood levels by summer 2012.
In the Eyecity contact lens specialty store business, online advertising and otheraspects of our brand strategy paid dividends as store visits increased, and we
maintained a firm grip on the top share of the domestic market. Japan's market
for intraocular lenses is the second largest in the world, and we successfullyincreased our share, producing major earnings growth. At the same time, the
new ceramics (composite bone) segment enjoyed steady sales of mainstay
prosthetic filler products while successfully paving the way for entry into themetallic implant market. Endoscopes for medical use dealt with slow demand indeveloped countries, where fiscal instability was ongoing, and delays in new
product launches, which put a damper on earnings. However, in emerging
markets, demand grew against a backdrop of population gains and medical
infrastructure development, providing robust growth for HOYA products as well.
As a result of the above developments, HOYA achieved consolidated net salesof ¥376,940 million, a year-on-year decrease of 10.9%, and profit before taxesof ¥58,530 million, a year-on-year decline of 20.8%. Sales were significantly
affected by lower product prices and the stronger yen. The flooding in Thailand
and consequent suspension of operations at a flagship eyeglass lens factory
had an impact on income before income taxes and minority interests, as it not
only caused sales and profits to decline due to lost opportunities but resulted ina ¥5,909 million loss from disaster in primarily plant and equipment.

Risk Management: Taking a Long-Term Perspective While Striking a Balance with Profitability
The Great East Japan Earthquake was a powerful reminder of the importanceof risk management. In the year under review HOYA constructed a production
plant for mask blanks in Singapore and a melting facility for optical glass in
China, with a view primarily to ensure business continuity during disasters.
During this time, major flooding occurred in Thailand as described above,
forcing HOYA's major eyeglass lens plant in the country to temporarily suspend
operations. Alternative production plans and other measures were quickly
implemented after the plant was damaged, but we were unable to supply
products as intended, and this had a major impact on the segment's
performance. We deeply regret this turn of events. We intend to draw on theseexperiences to conduct risk management even more proactively, but I think it isimportant not to forget that risk management must strike a balance withprofitability. Excessive risk measures can unnecessarily reduce profits, butthere is also the danger of insufficient risk measures leading to a business
continuity crisis. In this sense I believe that carefully gauging risk tolerance is an
important aspect of managing a company. HOYA puts the focus on business
continuity from a long-term perspective. We will engage in efficient risk
management while considering an appropriate balance with profitability.

Growth and Prospects: The Ten Year Roadmap
Since its establishment in 1941 as Japan's first optical glass manufacturer,
HOYA has pursued a basic business strategy of being “a big fish in a small
pond.” The “pond” is the market and the “fish” is the share of that market. This
expresses the basic strategy of gaining a dominant position by capturing the top
market share in limited niche markets. We believe that finding many small
ponds and creating our own new ponds will translate into sustained growth for
the HOYA Group as a whole.
HOYA is currently involved in two major areas, Information Technology and Life
Care.
Information Technology is becoming increasingly polarized. In thesemiconductor market, for example, a limited number of firms are competing todevelop high-end products while price competition dominates the tail-end as
products become commoditized. HOYA participates as a parts supplier by
providing cutting-edge technology, whether mask blanks or photomasks, but wemust also generate a certain amount of revenue and profits by becoming costcompetitive enough in commodity products to compete with Asian firms.
Moreover, just as LCD panels have become more compact and higher
resolution, hard disk drives larger capacity, and digital cameras smaller withhigher zoom power, our products must also provide more added value thanever before. HOYA will produce stable earnings in Information Technology by
outstripping the competition with dominatingly low costs and stable supply whileaccommodating market needs.

HOYA will also actively invest earnings from Information Technology in Life
Care, which will drive future growth. On the macro level, emerging countries
need to enhance their medical infrastructures to address population gains, andas wealth becomes more evenly distributed globally as economic disparities are
reduced, the medical market will only continue to grow. The decision therefore
to devote even more resources to Life Care is an appropriate one. Of course wewill continue to accelerate growth in existing businesses, and as a part of thatmergers and acquisitions will be pursued as an option. From the standpoint ofphysician relations, we are considering launching new businesses in areas
where networks have already been established through existing businesses;
specifically, internal medicine, ophthalmology and orthopedics.
In addition, projecting out the HOYA Group ten years from now, we intend to
add a third pillar to Information Technology and Life Care. Specifics will beworked out at a later date. Although making use of current resources is aprecondition, we intend to explore a range of possibilities without tying
ourselves exclusively to the manufacturer format.
There is no doubt that global society is currently in the midst of major change.
And I feel that HOYA itself is at a critical juncture. The times as they are makethe future very difficult to foresee, but 2012 will likely be a year for carefully
considering HOYA's future and how to bring it about.

To Our Shareholders and Customers
HOYA was confronted with many changes in 2011, but we were able to steadily
bolster our competitiveness. I am proud of the fact that we now have a businessstructure tough enough to weather a strong headwind in both Information
Technology and Life Care.
Moving forward, we will make new business creation a priority while considering
M&A as an option in order to further enhance our business portfolio.
We thank our shareholders and customers for their ongoing support andunderstanding.

Copyright 2012 © HOYA CORPORATION

In 2012, HOYA celebrates the 50th anniversary since first started the
manufacturing of eyeglass ophthalmic lenses, back in 1962. With a much longer
history and tradition in the field of optical lenses, this being the first productlaunched within the group companies, HOYA managed to share its expertise,competence and advanced proprietary technologies among the group's divisions.
With this strong background at its core, HOYA Group's Vision Care Division has
focused on research, development and production of high quality ophthalmic
lenses and quickly became one of the leading companies in the Global market ofvision correction.
Today, HOYA offers an extensive portfolio of eyeglass ophthalmic lenses andcooperates with a large network of Eye Care Professionals and optical stores forproviding high quality of vision for young and senior consumers, worldwide.
Moreover, with a strong belief that each consumer has unique visual needs,
HOYA developed the manufacturing technologies as well as the global IT platformof anamnesis, measurement and ordering tools to enable the integration of
consumer's individual requirements into the production of truly customized
lenses.
Among HOYA's Group companies, the Vision Care Division is a major contributor
in terms of sales, profits and innovation initiatives and will remain as one of thecore businesses to support future growth of HOYA Group.

Eyeglass business - Key Figures
Over 12,000 employees

46 Local RX Labs located in 21 countries

52 Countries covered : 31 with direct Subsidiaries and21 through Partners

Over 64,000 active accounts globally[excluding Partner Network]

Global Mass Production Facilities located in
Thailand, Vietnam, China and Hungary

1710 patent registered and examination [31.03.12]

Global RX Super Lab located in Thailand

Pan-European RX Super Lab located in Hungary

Leading products and technologies:
iD Free From Design Technology
The world's first integrated double surface progressive lens design with Balanced
View Control, a revolution in the reduction of distortion and swaying feelings.

Hi-Vision Long Life
The most durable*, scratch resistant antireflective coating in the market.
* Based on comparative evaluation performed by an independent party.

Copyright 2012 © HOYA CORPORATIONW ith the global demand for high quality lenses and the increasing competition in
the ophthalmic lens industry, HOYA accelerated the partial transfer of its
production capacities from local markets to overseas, as a measure of cost
reduction and production efficiency improvement. Thailand and later Vietnam has
been recognized as one of the most attractive locations for establishing Global
manufacturing facilities due to high quality of human resources and benefits interms of supply chain management. In 1974, ahead of many other Japanesecompanies, HOYA opened its first mass production plant of eyeglass lenses inThailand, followed in year 2000 by the first of the three global RX Super Lab
facilities. Since then, the Global Production center in Thailand has became one of
HOYA's strategic pillars for sustainable growth, proven in the last decade.
However, in October 2011, an unfortunate natural disaster hit Thailand taking livesof hundreds of people and leaving millions without houses. This was Thailand's
worst flood event in the past 50 years. Along with the civilian households, many of
the Industrial Estate parks located north of Bangkok have been covered by theflood waters, in spite of the preventive and emergency measures taken byauthorities. HOYA was one of the many Japanese companies affected by thisunprecedented event which constrained the Company to cease operations at allof its three Global RX Super Labs and the mass production plant located in
Ayutthaya for about 6 months, being severely damaged by the floodwaters. At thesame time, the mass production operation at the facility located in Patumthanihas been voluntary suspended, for about one month, to ensure worker's safety
and equipment protection.

Ayutthaya plant flooded

As a result and with Thailand's RX Super Labs accounting for a high share of
global supply to all regions, most of the HOYA' eyeglass lens subsidiaries,
including Japan and Europe, could not meet the demand from the customers andwere forced to suspend receiving orders for the lens types and volumes which
could not been produced in the local RX laboratories, mainly in the premium
segment of customized progressive lenses.
Consequently, compared to normal business circumstances, HOYA recorded anegative impact of about 18 billion yen in sales and about 12 billion yen in
operating profit in the second half of fiscal year ended March 2012. Additionally,in the second half of Fiscal Year ended March 2012, the Company recorded
extraordinary losses of about 6 billion yen due to the damage on factory's building
and equipments, which amount is expected to be recovered by insurance during
the next fiscal year.
Mr. Hiroshi Suzuki the President and CEO of HOYA Group as well as the entire
HOYA organization deeply apologizes to all customers worldwide for theinconvenience caused by suspending the operation in Thailand, in the aftermathof the flood event. HOYA also apologizes to all its stakeholders for the anxiety
caused with this unfortunate business interruption.
Copyright 2012 © HOYA CORPORATIONFrom the suspension of production at Ayutthaya plant, HOYA implemented thecontingency measures starting with increasing the manpower and machine
capacity in the local small sized laboratories worldwide. Experienced Thai
engineers were sent to various countries, including Japan, to support the local
teams in increasing production output and meeting the market demand. As an
example, in Europe the individual country labs connected into a flexible networkand based on a 24/7 schedule and extra-ordinary investment in additional
equipments, the entire region managed to triple total production capacity in lessthan 3 months, although not enough to respond to the demand.
W ith similar measures, all the other regions, including Japan, increased the local
production capacity and strived to catch up with the orders.
Meanwhile, at the Ayutthaya facility the buildings have been repaired, thedamaged equipments sent for restoration while new equipments were alreadyinstalled by the end of March 2012. Order receiving at Ayutthaya plant resumed
from April 2012 and by the end of June, with the production capacity
progressively increasing, HOYA reached a sufficient level of total global capacity[Thailand Super Labs + Local lab network] to meet the global pre-flood demand
and to ensure adequate output volumes for the summer season demand in thisyear.
Copyright 2012 © HOYA CORPORATION

Thai engineers transferred to EuropeBy seeking production efficiency and cost reduction, HOYA centralized a large
share of its production operations to overseas locations for each businessdivision, including eyeglass lens business. In contrast, this industry driven
strategy brings along a high level of business interruption risk due to potential
natural calamities, political unrest or other external factors. The unfortunate flood
event in Thailand offered a clear understanding for HOYA management team that
implementation of risk hedging structures and strategies must be accelerated.
Taking this experience as a lesson learned, HOYA refined its global production
strategy by setting the goal for a balanced, safe and stable supply chain, througha well determined level of production decentralization. HOYA's eyeglass lensdivision is the first of the group's divisions to implement this new direction as amandatory foundation for sustainable global growth.
In an ophthalmic eyeglass lens market valued globally at 12 Bill USD in year 2011and growing between 1.5% to 2.0% yearly, HOYA as one of the key players in theindustry will continue its journey towards market leadership through ambitious
targets, aiming a yearly growth rate of at least 3 times higher than the market
growth, from FY 2013 onwards.

Global growth strategies
One of the key strategic objectives for HOYA eyeglass lens division which will
represent the core driver for future growth is to become the fastest-growing
supplier of progressive lenses [PAL] worldwide.
To reach this objective, localization of Free-Form technology and Premium
Anti-Reflection coatings is an important initiative taken by HOYA since 3 years
ago and accelerated in the last quarter of the FY ended March 2012 as part of asignificant expansion of Local RX Labs production capacities and capabilities. At
the same time, HOYA will continue to bring in the market new and innovative PAL
designs and technologies as a result of focused R&D activities and close
cooperation with specialized academic partners.
Leveraging on a wide and strong distribution network, as well as trustworthy
relationship with its customers worldwide, HOYA will focus to grow its customer
base both with Independent Opticians and Retail Chains.
Also, with a rapid expansion of “digital” media, increase in product complexity anda demand for continuous education, HOYA will continue to provide the tools andthe knowledge to support its customers for achieving better businessperformance, especially in the field of prescribing and selling value added lenses.
To reach this goal, HOYA developed a robust, comprehensive and dynamic
palette of New Media Tools and established state of the art Education andExperience Centers opened in Budapest, Shanghai and Malaysia.
HOYA will continue its quest in pursuing growth in the key emerging markets bybuilding on its Multi-Brand / Multi-Channel strategy with a special focus on China,
India and Brazil.
Lens Simulation Center

Part of this growth is supported by a recently initiated M&A campaign, with a firstproject accomplished on April 2nd, when HOYA announced the acquisition of
Optotal HOYA S.A., its exclusive partner in Brazil. As a result, HOYA now
operates the largest prescription lens (Rx) laboratory and one of the largest
wholesale distribution networks in the ophthalmic lens market in Brazil.
The acquisition of Optotal was an important step for HOYA in setting the basis for
future growth within the BRIC countries and it is one of the multiple M&A projects
started by HOYA in various markets, with existing partners or industry players.
Stronger than ever, with a highly motivated and passionate team, ambitious
growth objectives and sustainable strategies, HOYA is ready to challenge theindustry leadership position in the coming years.

Copyright 2012 © HOYA CORPORATIONHOYA Plant at the Time of Foundation (roofs for heat exhaust and chimneys, characteristics of glass manufacturing plant, are visible)

HOYA's roots are in optical glass. The company was established in 1941 out of adesire to manufacture optical glass in Japan rather than relying on imports from
Germany. At the time optical glass was a cutting-edge industry. When the war
ended HOYA overcame the devastation and at long last began manufacturing
crystal products. It subsequently changed its name to HOYA Crystal Glass
Manufacturing, Co., Ltd.. As the economy started to recover, demand for opticalglass returned, and HOYA recommenced shipments of optical glass forbinoculars in 1951 and color filters for cameras the next year in 1952.
Making Crucibles (at the Time of

A major turning point came with the development of aspherical glass molded

Foundation)lenses in the 1980s and acquisition of an optical lens plant. This marked thecompany's full-fledged transition from manufacturing a material, glass, toproducing a processed product, lenses. At the time, camera manufacturers still
manufactured lenses themselves. HOYA therefore entered the market from the
upstream materials sector.
Aspherical glass molded lenses provided a tailwind. Lenses polished manually byskilled craftspeople took a great deal of time to produce and were very expensive.
Molded lenses, which were manufactured by pressing glass softened at hightemperatures, established for HOYA an inexpensive way to mass produce lenses.
Given their shape characteristics, one aspherical glass molded lens could play
the same role as two polished lenses, which made it possible to make camera

Aspherical glass molded lenses

bodies more compact. This cost effectiveness led the lenses to be adopted bycamera manufacturers as well. The conversion from film cameras to digital
cameras beginning the previous decade provided even greater impetus for
adoption of aspherical molded lenses, which developed into an essential
component for making cameras smaller and lighter.
In this way HOYA developed its businesses from manufacturing optical glass to
optical lenses.

Copyright 2012 © HOYA CORPORATIONThe optical properties of optical glass are expressed numerically by a refractive
index and Abbe number (reciprocal dispersion). Even with glass that appears thesame at first glance, different refractive indexes and Abbe numbers produce
entirely different characteristics. Mapping out these two properties produces adiagram that looks a lot like the Japanese archipelago (diagram at right).
Glass HOYA produces can be roughly divided into three categories, lenses that
correct chromatic aberration (FCD family; “A” area on diagram), lenses with ahigh refractive index (FDS family; “B” area on the diagram), and lenses thatcombine both properties (TAFD family; “C” area on the diagram). There arearound 100 types. The lens module used in a standard camera is made by

Nd-Vd Diagram [Enlarge]

combining multiple lenses with these differing properties.
These optical glass lenses are manufactured by mixing a material called silica
sand with several types of rare earth as necessary and then melting the mixture ina melting furnace and later pressing it into lens products.
In addition, HOYA provides other lens manufacturers with optical glass materials
that have yet to be processed into lenses. It also offers spherical lenses
manufactured using the lens processing and polishing processes, as well asaspherical molded lenses produced by aspherical lens pressing after
transforming glass material into preform.
Pressing of Optical Glass

In this way, HOYA is a reliable supplier of several thousand optical glass pressed
products and lenses every month.

Copyright 2012 © HOYA CORPORATIONThe digital camera market is the main consumer of optical glass, and the market
was growing rapidly for over ten years. On a volume basis, shipments of compact
digital cameras continue to increase, but product unit prices have plummeted, so
on a value basis, shipments have declined since their peak in 2008. By contrast,
the single lens camera market is riding a tailwind provided by the popularity of
mirrorless models, and it is expected to continue growing for the foreseeable
future.
Most cameras use HOYA's optical glass (prior to being processed in lenses) or
our lenses. As touched on above, the secret of our strength is an integrated
production system that can mass produce high precision lenses from the glassmaterials we develop. Compact cameras and digital single lens cameras are
expected to continue to get smaller and lighter. As this takes place camera
lenses will need to offer higher precision and greater functionality. As the leading
company in optical lenses, HOYA will continue working to improve R&D andmanufacturing technologies to enable us to provide superior products, from highadded-value glass to lenses.
Digital cameras will likely continue to play an important role in people's lives.
Global demand is also expected to continue alongside growth in emerging
markets. Compact cameras with higher and higher zoom power will continue tobe the trend as well, so growth in this lens market is also expected.
At the same time, looking at other sectors, demand growth is also anticipated in
CCTV cameras (security cameras) and car cameras, for example. CCTV cameras

will require high precision lenses as megapixels increase along with securityrelated demand. Car cameras are another promising market. Rearview cameras,
for example, are set to become mandatory in the U.S., and it is projected thatevery car will be equipped with multiple cameras for different purposes, such as
identification and sensing. Expectations are high for all the ways in whichcameras will be utilized as a set of eyes--as sensors for capturing objects--inindustry and everyday life. And as a professional in lenses, an indispensible
component of those eyes HOYA intends to utilize its integrated system of glassmaterial development, lens processing and mass production to continue helping
customers in need of optical glass and optical lenses as their valued partner.

Copyright 2012 © HOYA CORPORATION

Business Overview for the fiscal year ended March 2012

Note: Beginning with the fiscal year ended March 31, 2011, HOYA prepares its consolidated financial statements and other documents in compliance with theInternational Financial Reporting Standards (IFRSs)

Electronics related products
The markets of semiconductors and liquid crystal-related products generated acertain level of demand, especially in emerging countries, but growth was sluggish
on the whole amid economic uncertainties. HOYA managed to secure considerable
shipment volumes, especially among state-of-the-art products and high precision
products, but sales decreased, due to a continued falling trend of unit prices andyen's appreciation.
In contrast, shipment volumes of glass disks (substrates) for HDDs surpassed
those in the preceding consolidated fiscal year, but sales decreased slightly
compared to the previous year due to clients being affected by the flooding in
Thailand, on top of the impact of the strong yen.

Imaging related product
Lenses for digital cameras contributed significantly to increased sales from thepreceding consolidated fiscal year, driven by interchangeable lenses for digital
single-lens cameras particularly noteworthy was the increase in the ratio of highvalue-added glass models, in which we had been putting a great deal of sales
expansion efforts.
As a result, the Information Technology segment posted sales of 182,089 million
yen, a 16.6% decrease over the preceding consolidated fiscal year. The segment
profit (profit before tax) decreased 19.6% year on year, to 37,527 million yen.
On July 1, 2011, an agreement was reached and concluded between HOYA andRicoh Co., Ltd. to transfer the PENTAX Imaging Systems Business to Ricoh andthe transfer was executed on October 1, 2011. As a result, the Business isclassified as a discontinued operation from this consolidated fiscal year.

SalesProfit before tax/Ratio of profit before tax

Health Care related Products
On July 1, 2011, an agreement was reached and concluded between HOYA andRicoh Co., Ltd. to transfer the PENTAX Imaging Systems Business to Ricoh andthe transfer was executed on October 1, 2011. As a result, the Business isclassified as a discontinued operation from this consolidated fiscal year.
Sales of contact lenses grew, thanks to an increase in the number of customers
visiting directly-managed stores, a sales expansion of products with high added
value, and an increase in the number of stores, resulting from aggressive openingof new stores.

Medical related Products
Medical endoscopes remained sluggish in European market due to the financial
crisis. In the United States, however, purchase activities are picking up. Markets inemerging countries remained healthy. As a result, sales rose in comparison withthe preceding consolidated fiscal year as a whole. As for intraocular lenses (IOL),
soft lenses sold at a healthy pace and sales increased from the preceding
consolidated fiscal year.
As a result, the Life Care segment reported sales of 192,947 million yen, a 5.0%
decrease over the preceding consolidated fiscal year. The segment profit was
24,568 million yen, down 33.1% from the preceding consolidated fiscal year.

SalesCopyright 2012 © HOYA CORPORATION

Profit before tax/Ratio of profit before tax

Management Discussion and Analysis (All Operations*)* “All operations” means that the financial figures include both “continuing operations” and “discontinued operations”.

Scope of Consolidation
As of March 31, 2012, the HOYA Group (“HOYA”) consisted of the HOYACORPORATION, 103 consolidated subsidiaries (4 of which are domestic and99 overseas) and nine affiliates (4 of which are Japanese and the other 5overseas).
HOYA is operated and managed through global consolidated groupmanagement. The independent management teams of business segments,
including Information Technology, and Life Care, are responsible for
executing management strategies. Regional headquarters in America,
Europe and Asia support business operations by strengthening relationships
with countries and areas in the respective regions, such as by providing legal
support and conducting internal audits. In particular, HOYA has its treasury
base in the Netherlands.

Adoption of the International Financial Reporting Standards
Effective from the fiscal year ended March 31, 2011, HOYA prepares its
consolidated financial statements in compliance with International Financial
Reporting Standards (IFRSs). With respect to reporting segments presented
in the overview of operation by business category, HOYA divides its business
into three reporting segments in accordance with IFRSs. These segments are
Information Technology, Life Care, and Other Businesses.
The reportable segment are constituent units of the Group for which separate
financial information is obtained and examined on a regular basis by the
Board of Directors, the chief operation decision maker, to determine theallocation of management resources and evaluate the business performance.
In accordance with its management philosophy, the Group has categorized“Information Technology” and “Life and Culture” as its business domains, toachieve sustainable growth in corporate value in these business domain, theGroup has been making decisions on the allocation of management
resources and monitoring the operating results. As a result, the Groupconsists of three reportable business segments: the Information Technology
business, the Life Care business and the Others business, which areconsistent with the above business domains.
The Information Technology business handles products for the myriad of
applications spawned by the digitalization of information and the emergenceof the Internet. This segment produces and sells a broad array of I/O(input/output) device related products in the information technology sector,
including electronics related products that are essential for modern digital
information and communications technologies, and optical technology-based
imaging related products that are necessary to import pictures and video
images as digital information.
The Life Care business produces and sells health care related products fordaily use in the healthcare and medical sectors, and medical related
products, including equipment and materials for use in medical procedures.
This segment is typically required to obtain approvals and permissions inaccordance with the Pharmaceutical Affairs Act in Japan and otherregulations. As a result, sophisticated technologies and highly reliable quality
control systems are critical for smooth business operation in this sector.
The Other Businesses segment mainly offers information system services,and takes charge of new businesses.

Sales
During the consolidated fiscal year ended March 31, 2012, a sense of
uncertainty continued to linger in the global economy due to fiscal concerns in
the United States and Europe, despite the growth observed in emerging
countries. Japan suffered the impact of the Great East Japan Earthquake inthe beginning of the fiscal year, but showed signs of recovery along with therestoration of supply chains. However, causes of concern still remain, such as
the electricity shortage and the radioactivity issue stemming from the nuclear
power plant accident, in addition to the accelerated uptrend of the JapaneseYen, further heightening the sense of anxiety over the future of the economy.
On top of this, the massive flooding that occurred in Thailand in October 2011
inflicted huge damage to manufacturing sites of Japanese companies andheavily affected supply chains.
Against such uncertainties, HOYA properly responded to changes in orders
received according to market demand, and basically maintained thecompetitiveness of its businesses per se, but its sales were affected greatly
by a fall in unit prices and the strong yen. Furthermore, HOYA's production
sites of flagship products such as eyeglass lenses, which are located in
Thailand, were severely affected by the flood, such as being forced tosuspend operations for a long period of time. It was also affected by the
production sites of clients including HDD manufacturers being flooded.
As a result, sales for the fiscal year under review amounted to ¥376,940
million, down ¥46,123 million (10.9%) year on year. By principal businesssegment, net sales decreased 16.6% year on year in the Information
Technology business, and decreased 5.0% year on year in the Life Carebusiness.
By customer region, net sales to customers in Japan decreased 9.5%, to¥144,943 million and net sales to overseas customers decreased 11.7%, to¥231,996 million. As a result, the composition of net sales was 38.5%
domestic and 61.5% overseas.
HOYA calculated the effect of exchange rates on operating results during the
fiscal year under review by comparing the foreign currency denominatedfinancial statements of its overseas subsidiaries when converted into yen at
the average exchange rates during the fiscal year under review, with thesame statements when converted into yen at the average exchange rates
prevailing during the previous fiscal year. In the foreign exchange market, theyen appreciated 7.3% against the U.S. dollar to ¥78.98 on average during the
fiscal year under review, while it gained 2.7% against the euro to ¥109.55 and5.8% against the Thai baht to ¥2.58 over the preceding fiscal year. For theGroup overall, the effect of exchange rates reduced net sales by ¥7,197
million and net profit by ¥1,297 million.
Sales

Transfer of the PENTAX Imaging Systems Business
On July 1, 2011, an agreement was reached and concluded between HOYA
and Ricoh Co., Ltd. to transfer the PENTAX Imaging Systems Business to
Ricoh and the transfer was executed on October 1, 2011. As a result, theBusiness is classified as a discontinued operation from the fiscal year underreview.

Flood Damage in Thailand
The massive flooding that occurred in Thailand in October 2011 inflicteddamage directly to two plants at HOYA LENS THAILAND LTD., which is
HOYA's flagship manufacturing site for eyeglass lenses.
Heavy damage was incurred particularly at Ayutthaya Plant, which deals incustom-made products: its premises were flooded, so operations weresuspended on October 12. At the Plant, the ground floor was submerged
once but flood waters subsided towards the end of the year, so efforts weremade to restore its infrastructure and manufacturing facilities, which resulted
in the resumption of operations in the beginning of April 2012.

Fortunately, neither deaths nor injuries have been reported. We sincerely
apologize for having caused substantial inconvenience to many customers
during the suspension of operations.

IncomeAs outlined above, profit before taxes amounted to ¥58,530 million and profit
for the year amounted to ¥42,680 million, a 20.8% and 28.4% down year on
year respectively. The ratio of profit before tax was 15.5%, a 2.0 percent point
decrease over the previous fiscal year's 17.5%.
Profitability of the Information Technology deteriorated from the previous
fiscal year due mainly to the slowdown in demands for mask blanks andphotomasks for semiconductor and glass disks for HDDs during the first halfof the fiscal year under the influence of the Great East Japan Earthquake, in
addition to the appreciation of the Japanese yen and the surge in the rearearth prices in a part of the businesses. On the other hand, profitability for
optical glass and optical lenses business improved from the previous fiscal
year as the Company received larger orders of the high precision lenses on
the back of the brisk market of single lens digital cameras.
In the life Care business, eyeglass lens business recorded the reduction insales and profit caused by the loss of sales opportunities due to thesuspension of operation of the flagship plant for eyeglass lenses as a result of
the flooding in Thailand, in addition a loss of plant facilities, etc. due todisaster in the amount of 5,909 million yen was recorded. Contact lens andintraocular lens businesses enjoyed high profitability continuously from theprevious fiscal year. Medical endoscope business secured the similar level ofprofitability as the previous year thanks to the increasing demands in theemerging countries although the medical institutions in the United States andEurope were holding off buying in the midst of financial uncertainty.
Return on assets (ROA) was 7.5%, and return on equity attributable toowners of the Company (ROE) was 11.3%.
Profit before tax/Profit for the year

Profit Ratios

Profitability

Stock Price DataDividends
HOYA determines dividends for each fiscal year by taking into account theCompany's performance and medium- and long-term capital requirements. It
also tries to strike a balance between returning profits to shareholders,
employee welfare benefits, and supplementing internal reserves to fundfuture growth. HOYA's policy regarding internal reserves is to continue toactively appropriate resources for marketing for consumer products, primarily
in the medical field, while also making timely investments in corporate
mergers and acquisitions and R&D for future growth, as well as investing toensure sufficient production capacity and to develop next-generation
technologies and new products.
In the fiscal year under review, after balancing the need for internal reserves
for future growth, HOYA paid an interim dividend of ¥30 per share and a yearend dividend of ¥35 per share, for an aggregate dividend of ¥65 per share forthe full year, on a par with the previous fiscal year.
Dividends per share

Financial Position
Total assets at the end of the current fiscal year decreased ¥3,406 million, or
0.6% year on year, to ¥575,235 million.
Non-current assets decreased ¥32,624 million (16.0%) year on year, to¥171,561 million.
Current assets increased by ¥29,218 million (7.8%) year on year, to ¥403,674
million. The increase was primarily due to a rise in other short-term financial
assets by ¥20,308 million and a ¥19,521 million increase in cash and cash
equivalents, while trade and other receivables decreased by ¥10,763 million.
Liabilities amounted to ¥190,582 million, a ¥10,518 million decrease from thelevels of a year earlier.
Total equity increased by ¥7,112 million year on year, to ¥384,653 million,
partly due to a ¥15,177 million increase in retained earnings. Equity

attributable to owners of the Company, which is obtained by deducting noncontrolling interest in equity from total equity, amounted to ¥384,802 million,
improving the ratio of equity attributable to equity holders of the parent by 1.8
percent point from a year earlier levels, to 66.9%.
Total Assets/Total equity/Owners' Equity Ratio

Capital Expenditures / Depreciation and Amortization
The total capital investment amounted to ¥33,185 million during the fiscal
year under review, a decrease of ¥5,303 million (13.8%) over the preceding
fiscal year. Investment in the Information Technology business amounted¥20,474 million and investment in Life Care business amounted ¥11,780
million, which account for 61.7% and 35.5% of the total investment by theGroup respectively.
The Great East Japan Earthquake that struck on March 11, 2011 caused
some damage HOYA's facilities. The cost to repair the damaged facilities did
not significantly affect the results of the fiscal year under review. However,the Earthquake has given rise to a greater need to have multiple
manufacturing sites from the viewpoint of risk dispersion, so new plants for
information technology business area were established overseas which
include the plant of mask blanks for semiconductor in Singapore and glass
melting facility in China. They were partly accounted for the amount of capital
investment in the fiscal year under review.
Furthermore, the massive flooding in Thailand that occurred in October 2011
flooded HOYA's eyeglass lens production site and forced it to suspend
operations. Consequently, HOYA was forced to enhance production capacity
in the group factories located in other than the Thailand, as alternative
production site, and manufacturing facilities in the Thailand had to becompletely replaced at the plant, and they were partly accounted for in thefiscal year under review.

Depreciation for the fiscal year under review decreased 10.8%, to ¥27,927
million. The Information Technology accounted for approximately 60% of this,at ¥17,983 million.
Capital Expenditure/Depreciation and Amortization* Depreciation and amortization includes also impairment losses.

Cash Flow
Net cash provided by operating activities amounted to ¥73,719 million, adecrease of ¥18,795 million from the previous fiscal year. The main positive
factors were profit before taxes from continuing operations of ¥54,021 million(down ¥9,224 million year on year), depreciation and amortization of ¥27,927
million (down ¥3,367 million), and trade and other receivables of ¥10,791 (up¥8,120 million). The main negative factors included an increase in inventoriesof ¥4,800 million (down ¥5,326 million) and trade and other payables of¥6,728 million (up ¥13,735 million).
Net cash used in investing activities amounted to ¥22,497 million, a decreaseof ¥15,994 million compared with the previous fiscal year. This was primarily
attributable to ¥16,618 million in withdrawals of time deposit (up ¥15,070
million), withdrawals of transferable deposit of ¥10,000 million, proceeds frombusiness transfer of ¥12,537 million (down ¥8,117 million), deposits fortransferable deposit of ¥30,000 million, and payments for acquisition ofproperty, plant and equipment of ¥31,184 million (down ¥4,857 million).
Net cash used in financing activities amounted to ¥29,259 million, a decreaseof ¥1,985 million. This was mainly due to a total of ¥28,003 million in
dividends paid (up ¥32 million year on year).
As a result of the above, the balance of cash and cash equivalents as ofMarch 31, 2012, was ¥204,772 million, a year on year increase of ¥19,520
million.

Net cash provided by operating activities

Subsequent Events
Nothing of note.

Copyright 2012 © HOYA CORPORATION

Disclaimers
HOYA has made all possible efforts with regard to information posted on this website and other linked company's
websites. However, no guarantee is given regarding the accuracy, completeness, validity, immediacy or timeliness of thisinformation, any of which could include errors, misprints or other defects.
HOYA and its information providers accept no responsibility whatsoever for any losses, financial or otherwise, arisingfrom the use of this information. In addition, HOYA and its information providers accept no responsibility whatsoever for
any losses, financial or otherwise, arising from computer system malfunction or any other cause resulting in error,
invalidity, delay, omission, defect or suspension of the information provided.
HOYA may make comments and disclose information which include forward-looking statements with respect to HOYA's
plans and future performance. Such forward-looking statements that are not historical fact are based on management's
assumptions and beliefs in light of the information available to it when such statements were prepared. We do notguarantee the accuracy or completeness of the information herein.
HOYA cautions that a number of factors could cause actual results to differ materially from those discussed in theforward-looking statements. Such factors include but are not limited to fluctuation of exchange rates and interest rates,international situations, market trends and economic conditions, competition, production capacity and research anddevelopment capabilities and so on. Please refer to Business Risk.
The information posted on this HOYA Annual Report website is not provided for the purpose of inducing investment
activities. Investors are advised that any investment must be made at the investor's own discretion.

Copyright 2012 © HOYA CORPORATION