HOYA Corporation and its subsidiaries

Consolidated Financial Statements
under IFRSs andIndependent Auditor’s Report
For the year ended 31 March 2011HOYA Corporation

Contents

Independent Auditor’s Report

3

Consolidated Statement of Financial Position

4

Consolidated Statement of Comprehensive Income

6

Consolidated Statement of Changes in Equity

8

Consolidated Statement of Cash Flows (including discontinued operations)11

Notes to the Consolidated Financial Statements

132

1. General information

13

2. Basis of consolidated financial statements

13

3. Significant accounting policies

17

4. Critical accounting judgements and key sources of estimation uncertainty

31

5. Operating segment information

33

6. Property, plant and equipment

37

7. Goodwill and intangible assets

40

8. Impairment losses

42

9. Investments in associates

45

10. Income taxes

46

11. Other financial assets and liabilities

51

12. Other assets and liabilities

52

13. Inventories

53

14. Trade and other receivables

53

15. Cash and cash equivalents

54

16. Interest-bearing debt

54

17. Finance lease obligations

55

18. Operating lease arrangements

56

19. Retirement benefit plans

57

20. Other Provisions

61

21. Trade and other payable62

22. Share capital and other equity items

63

23. Financial instruments

66

24. Assets held for sale81

25. Share-based payments

82

26. Revenue and expenses (excluding finance income and costs)

85

27. Finance income and costs87

28. Discontinued operations

88

29. Other comprehensive income

90

30. Earnings per share

92

31. Non-cash transactions

93

32. Main subsidiaries

94

33. Related party disclosure

96

34. Business combinations

97

35. Sale of subsidiary99

36. Contingent liabilities

99

37. Commitments for expenditure99

38. Subsequent events99

39. Approval of financial statements

99

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

HOYA Corporation and its subsidiaries

Consolidated Statement of Financial Position
As at 31 March 2011

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))

Notes

As at 31 March2010

As at 31 March2011

As at 31 March2011

ASSETSNON-CURRENT ASSETS:
6, 8,37

122,203

118,574

1,426,030

Goodwill

7,8

5,484

2,629

31,614

Property, plant and equipment—net
Intangible assets

7,8

17,78215,157

182,279

Investments in associates

9

9,214

11,247135,263

Long-term financial assets

11,23

18,80919,043229,021

Other non-current assets

8,12,19

2,962

1,634

19,651

10

44,68435,901

431,767

221,138

204,185

2,455,625

Deferred tax assets
Total non-current assets
CURRENT ASSETS:
Inventories

13

61,214

63,665

765,668

Trade and other receivables

14,23

94,29886,454

1,039,733

Other short-term financial assets

11,23

5,586

26,964324,283

2,326

2,273

27,340

Income tax receivables
Other current assets

12

7,465

9,848

118,431

Cash and cash equivalents

15,23

167,938

185,252

2,227,922

338,827

374,456

4,503,377

325

—

—

Total current assets

339,152

374,456

4,503,377

Total assets

560,290578,641

6,959,002

Sub total
Assets held for sale

4

24

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s ReportHOYA Corporation and its subsidiaries

Consolidated Statement of Financial Position
As at 31 March 2011-Continued(Millions of Yen)

Notes

As at 31 March
2010(Thousands of U.S.Dollars(Note 2))

As at 31 March2011

As at 31 March2011

EQUITY AND LIABILITIESEQUITY
Share capital

22(1)

6,264

6,264

75,336

Capital reserves22(1)15,89915,899191,204

Treasury shares22(2)(11,010)(10,964)(131,854)

Other capital reserves22(2),25(3,014)(2,495)(30,015)

Retained earnings

22(3),38

396,019427,722

5,143,980(46,603)(59,590)(716,654)

357,555

376,836

4,531,997

Accumulated other comprehensive income/(loss)
Equity attributable toowners of the Company
Non-controlling interests

22(4)Total equity

1,194

705

8,480

358,749

377,541

4,540,477

LIABILITIESNON-CURRENT LIABILITIES:Interest-bearing long-term debt

16,17,23

102,995

100,769

1,211,894

Other long-term financial liabilities

11,23

7

197

2,374

Retirement benefits obligation

19

8,186

8,121

97,663

Other provisions

20

1,718

1,461

17,569Other non-current liabilities

12

1,703

1,198

14,413

Deferred tax liabilities

10

10

214

2,575

114,619

111,960

1,346,488

16,17,23

4,290

2,415

29,050Trade and other payables

21,23

47,27951,433

618,559

Other short-term financial liabilities

11,23

385

823

9,893

4,469

3,110

37,398

904

803

9,658

Total non-current liabilities
CURRENT LIABILITIES:Interest-bearing short-term debt

Income tax payables
Other provisions

20

29,59530,556367,479

Total current liabilities

86,922

89,1401,072,037

Total liabilities

201,541

201,100

2,418,525

Total equity and liabilities

560,290578,641

6,959,002

Other current liabilities

12

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

5

HOYA Corporation and its subsidiaries

Consolidated Statement of Comprehensive Income
For the year ended 31 March 2011

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))

Notes

For the year
ended 31
March 2010

For the year
ended 31
March 2011

For the year
ended 31
March 2011

Sales

26

402,430

413,349

4,971,127

Finance income

27

912

918

11,038

Share of profit of associates

9

466

1,605

19,303

Other income

6,26

Continuing operations
Revenue:

Total Revenue

5,341

3,741

44,987409,149

419,613

5,046,455

10,930(4,834)(58,131)

Expense:Changes in inventories of goods, products and work in progress

90,06998,975

1,190,318

Employee benefits expense

19,26

91,27593,9971,130,451

Depreciation and amortisation

6,7,26

31,17230,369365,228

7,046

7,395

88,932

Raw materials and consumables used

Subcontracting cost

10,64812,088145,375

Commission expense

26

21,764

21,510258,688

Impairment losses

8

834

1,944

23,379Advertising and promotion expense

Finance costs

27

2,896

2,585

31,085

Other expenses

6,7,18,26

92,001

91,826

1,104,350

Total Expense

358,635

355,855

4,279,675

Profit before tax

50,51463,758766,780

Income tax expense

10

Profit for the year from continuing operations

9,957

14,053

169,004

40,55749,705

597,776

960

9,874

118,743

41,51759,579716,519

Discontinued Operations
Profit for the year from discontinued operations

28

Profit for the year
Other comprehensive income:29

Net gain on revaluation of available-for-sale financial assets

495

406

4,880

Exchange differences on translation of foreign operations

5,866(14,188)(170,635)

Share of other comprehensive income of associates

(281)

241

2,899

(64)

511

6,152

Total other comprehensive income/(loss)

6,016(13,030)(156,704)

Total comprehensive income for the year

47,53346,549559,815

Owners of the Company

41,21359,744

718,512

Non-controlling interests

304

(165)

(1,993)41,51759,579716,519

47,21646,757562,322

Income tax relating to components of other comprehensive
income10

Profit attributable to:

Total
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interests
Total

6

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

317

(208)

(2,507)47,53346,549559,815

HOYA Corporation and its subsidiaries

Consolidated Statement of Comprehensive Income
For the year ended 31 March 2011-Continued

(Yen)

Notes

Basic earnings per share(U.S.Dollars(Note 2))

For the year
ended 31
March 2010

For the year
ended 31
March 2011

For the year
ended 31
March 2011

93.02

115.601.39

30

Continuing operations

2.22

22.89

0.28

95.24

138.49

1.67

Continuing operations

92.93

115.54

1.39

Discontinued operations

2.22

22.87

0.27

95.15

138.41

1.66

Discontinued operations
Basic earnings per share
Diluted earnings per share

30

Diluted earnings per share

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

7

HOYA Corporation and its subsidiaries

Consolidated Statement of Changes in Equity
For the year ended 31 March 2011

(Millions of Yen)

Notes

Balance at 1 April 2009

Share capital

Capital reserves Treasury shares

22(1)

22(1)

22(2)

Other capitalreserves
22(2)

6,264

15,899(7,985)(3,303)Retainedearnings
22(3)382,941

Total comprehensive
Income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

41,21329

Total comprehensive
income/(loss) for the year

41,213

Transactions with owners
Contributions by and distributions
to owners
Acquisition of treasury shares(3,275)

Disposal of treasury shares
Dividends, 65 Yen per share

250

(140)

22(3),38(28,135)

Change in non-controlling interests
Share-based payments (Stock option)

25

429

Total contributions by anddistributions to owners(3,025)289(28,135)

Total transactions with owners(3,025)289(28,135)(11,010)(3,014)

396,019

Balance at 31 March 2010

6,264

15,899Total comprehensive
Income/(loss) for the year
Profit for the year
Other comprehensive income/(loss)

59,74429

Total comprehensive
income/(loss) for the year

59,744

Transactions with owners
Contributions by and distributions
to owners
Acquisition of treasury shares(6)

Disposal of treasury shares
Dividends, 65 Yen per share

52

(25)

22(3),38(28,041)

Change in non-controlling interests
Share-based payments (Stock option)

25

544

Total contributions by anddistributions to owners

46

519

(28,041)

Total transactions with owners

46

519

(28,041)(10,964)(2,495)

427,722

Balance at 31 March 2011

8

6,264

15,899HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s ReportHOYA Corporation and its subsidiaries

Consolidated Statement of Changes in Equity
For the year ended 31 March 2011-Continued(Millions of Yen)

Notes

Balance at 1 April 2009

Net gain/(loss)
on revaluationof availablefor-salefinancial assets

Exchangedifferenceson translationof foreign
operations(303)(50,314)

Accumulated
Share of otherothercomprehensive
comprehensive
income ofincome/(loss)
associates(1,989)(52,606)

EquityAttributable to Non-controllinginterests
ownersTotal equity
22(4)of theCompany

341,210

1,774

342,984

41,213304

41,517

Total comprehensive
Income/(loss) for the year
Profit for the year
Other comprehensive
income/(loss)

29

Total comprehensive
income/(loss) for the year

451

5,833

(281)

6,003

6,003

13

6,016

451

5,833

(281)

6,003

47,216317

47,533

Transactions with owners
Contributions by anddistributions to owners
Acquisition of treasury
shares
Disposal of treasury shares
Dividends, 65 Yen per share

22(3),
38(3,275)(3,275)110

110(28,135)

Change in non-controllinginterests
Share-based payments(Stock option)

25

(159)

(28,294)

(738)

(738)

429

429

Total contributions by anddistributions to owners(30,871)(897)(31,768)

Total transactions withowners(30,871)(897)(31,768)

357,555

1,194

358,749

59,744(165)

59,579Balance at 31 March 2010

148

(44,481)(2,270)(46,603)

Total comprehensive
Income/(loss) for the year
Profit for the year
Other comprehensive
income/(loss)

29

Total comprehensive
income/(loss) for the year213

(13,441)

241(12,987)(12,987)(43)(13,030)

213(13,441)

241(12,987)

46,757(208)

46,549Transactions with owners
Contributions by anddistributions to owners
Acquisition of treasury
shares(6)(6)

Disposal of treasury shares

27

27

Dividends, 65 Yen per share

22(3),
38(28,041)

Change in non-controllinginterests
Share-based payments(Stock option)

25

(69)

(28,110)

(212)

(212)

544

544

Total contributions by anddistributions to owners(27,476)(281)(27,757)

Total transactions withowners(27,476)(281)(27,757)

376,836705

377,541

Balance at 31 March 2011

361

(57,922)(2,029)(59,590)

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

9HOYA Corporation and its subsidiaries

Consolidated Statement of Changes in Equity
For the year ended 31 March 2011-Continued(Thousands of U.S.Dollars(Note 2))

Notes

Balance at 31 March 2010

Share capital

Capital reserves Treasury shares

22(1)

22(1)

22(2)

Other capitalreserves22(2)75,336

191,204(132,414)(36,249)

Retainedearnings
22(3)4,762,704

Total comprehensive
Income/(loss) for the year
Profit for the year

718,512

Other comprehensive income/(loss)

29

Total comprehensive
income/(loss) for the year

718,512

Transactions with owners
Contributions by and distributions
to owners
Acquisition of treasury shares(70)

Disposal of treasury shares

630

Dividends, 0.78 Dollars per share(308)

22(3),38(337,236)

Change in non-controlling interests
Share-based payments (Stock option)

25

6,542

Total contributions by anddistributions to owners

560

6,234

(337,236)

Total transactions with owners

560

6,234

(337,236)(131,854)(30,015)

5,143,980

Balance at 31 March 201175,336

191,204(Thousands of U.S.Dollars(Note 2))

Notes

Balance at 31 March 2010

Net gain/(loss)
on revaluationof availablefor-salefinancial assets

Exchangedifferenceson translationof foreign
operations

1,775(534,932)

Accumulated
Share of otherothercomprehensive
comprehensive
income ofincome/(loss)
associates(27,307)(560,464)

EquityAttributable to Non-controllinginterests
ownersTotal equity
22(4)of theCompany

4,300,117

14,364

4,314,481

718,512(1,993)

716,519

Total comprehensive
Income/(loss) for the year
Profit for the year
Other comprehensive
income/(loss)

29

Total comprehensive
income/(loss) for the year

2,564

(161,653)

2,899(156,190)(156,190)(514)(156,704)

2,564(161,653)

2,899(156,190)

562,322(2,507)559,815

Transactions with owners
Contributions by anddistributions to owners
Acquisition of treasury
shares
Disposal of treasury shares
Dividends, 0.78 Dollars per
share

22(3),
38

(70)

(70)

322

322

(337,236)

Change in non-controllinginterests
Share-based payments(Stock option)

25

(833)

(338,069)(2,544)(2,544)

6,542

6,542

Total contributions by anddistributions to owners(330,442)(3,377)(333,819)

Total transactions withowners(330,442)(3,377)(333,819)

4,531,997

8,480

4,540,477

Balance at 31 March 2011

10

4,339

(696,585)(24,408)

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(716,654)

HOYA Corporation and its subsidiaries

Consolidated Statement of Cash Flows (including discontinued operations)
For the year ended 31 March 2011

(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))

For the year
ended 31
March 2010

For the year
ended 31
March 2011

For the year
ended 31
March 2011

50,51463,758766,780

Profit before tax from discontinued operations

1,043

10,162

122,212

Depreciation and amortisation

33,954

31,294376,355

834

1,944

23,379Notes

Cash flows from operating activities
Profit before tax

Impairment losses
Finance income

(920)

(923)

(11,099)

Finance costs

2,896

2,585

31,085

Share of profits of associates(466)(1,605)(19,303)(Gain)/loss on sales of property, plant and equipment

307

(177)

(2,134)

1,057

539

6,481

—

(10,343)(124,386)

6,703

4,083

49,114

95,922

101,317

1,218,484

Decrease/(increase) in inventories

10,093(10,126)(121,774)

Decrease/(increase) in trade and other receivables(12,737)

2,671

32,126

1,126

7,007

84,257

(455)

(306)

(3,674)

93,949100,563

1,209,419

846

791

9,520

Loss on disposal of property, plant and equipment
Gain on business transfer

28

OthersCash generated from operations (before movements in working
capital)Movements in working capital

Increase in trade and other payables
Decrease in retirement benefits obligation and otherprovisions
Sub totalInterests received

55

56

668

Interests paid

(2,037)(1,894)(22,776)

Income taxes paid

(10,727)(8,370)(100,666)

Dividends received

Income taxes refunded
Net cash generated from operating activities

1,648

1,368

16,45383,73492,514

1,112,618

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

11

HOYA Corporation and its subsidiaries

Consolidated Statement of Cash Flows (including discontinued operations)
For the year ended 31 March 2011-Continued(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))

For the year
ended 31
March 2010

For the year
ended 31
March 2011

For the year
ended 31
March 2011

Withdrawals of time deposit

4,652

1,548

18,614

Deposits for time deposit(3,157)(2,959)(35,581)—(20,000)(240,529)

2,050

1,140

13,709(26,651)(36,041)(433,445)

43

—

—

—

(569)

(6,848)(3,423)

—

—

Notes

Cash flows from investing activities

Payments for purchase of certificate of deposit
Proceeds from sales of property, plant and equipment
Payments for acquisition of property, plant and equipment
Proceeds from disposal of investment securities
Payments for purchase of investment securities
Net cash outflow on acquisition of subsidiary

34

Payments to minority shareholders on merger
Proceeds from business transfer

28

(85)

(21)

(251)

—

20,654

248,390

Other proceeds

739

596

7,165

Other payments(14,891)(2,839)(34,139)(40,723)(38,491)(462,915)(28,236)(27,971)(336,392)

Net cash used in investing activities
Cash flows from financing activities
Dividends paid to owners of the Company

(159)

(69)

(833)

Increase (decrease) in short-term debt

(1,563)

112

1,342

Decrease in commercial paper

Dividends paid to non-controlling interests(41,978)——

Proceeds from long-term borrowings

225

—

—

Repayments of long-term borrowings(9,145)(3,337)(40,128)

Proceeds from disposal of treasury shares

0

0

1

Payments for purchase of treasury shares(3,275)

(6)

(70)

(709)

—

—

Payments for purchase of treasury shares by subsidiaries
Proceeds from exercise of stock options
Net cash used in financing activities

110

27

322

(84,730)(31,244)(375,758)

Net increase/(decrease) in cash and cash equivalents(41,719)

22,779273,945

Cash and cash equivalents at the beginning of the year

207,928

167,938

2,019,702

1,729(5,465)(65,725)

167,938

185,252

2,227,922

Effects of exchange rate changes on the balance of cash andcash equivalents in foreign currencies
Cash and cash equivalents at the end of the year

15

Note:
Cash flows from discontinued operations are stated in Note 28 “Discontinued operations” and non-cash transactions are stated in Note 31 “Non-cash transactions”.

12

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s ReportHOYA Corporation and its subsidiaries

Notes to the Consolidated Financial Statements

1. General information
HOYA Corporation (the “Company”) is a limited company incorporated in Japan. The addresses of its
registered office and principal place of business are disclosed on the Company’s website (URL http://
www.hoya.co.jp). The principal activities of the Company, its subsidiaries and its associates (the“Group”) are described in Note 5 “Operating segment information”.

2. Basis of consolidated financial statements(1) Basis of consolidated financial statements
The accompanying consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (“IFRSs”).
The Group first adopted IFRSs for the fiscal year ended 31 March 2010, with a date of transition to IFRSs
on 1 April 2008.
The accompanying consolidated financial statements are stated in Japanese Yen and rounded to thenearest million yen.
The translations of Japanese yen amounts into U.S. dollar amounts are included solely for theconvenience of readers outside Japan using the rate of ¥83.15 to $1, the foreign exchange rate at
31 March 2011. Such translations should not be construed as representations that the Japanese yenamounts could be converted into U.S.dollars at that or any other rate.
The Company and its domestic subsidiaries maintain their books and prepare their financial statementsin accordance with accounting principles generally accepted in Japan (“Japanese GAAP”) while its
foreign subsidiaries maintain their books and prepare their financial statements in conformity withaccounting principles generally accepted in the countries of their domicile. Certain adjustments andreclassifications have been incorporated in the accompanying consolidated financial statements toconform to IFRSs. These adjustments were not recorded in their statutory books and ledgers.

(2) Effects of applying new accounting standards
The Group adopted the following IFRSs and IFRIC interpretations for the year ended 31 March 2011;
IFRSs

IAS 1

Subject of new standards/amendments and transitional provisions

Presentation of Financial
Statements- Clarification on current/non-current classification of the liability component of
convertible instruments

IAS 7

Statement of Cash Flows- Clarification on the classification of expenditures not capitalised

IAS 17

Leases- Revision on the classification of leases which includes both land and buildings
elements

IAS 27

Consolidated andSeparate Financial
Statements- Revision to step acquisition that previously-held equity interest in the acquiree
must be remeasured at acquisition-date fair value and recognise the resulting gainor loss, if any, in profit or loss.
- Revision to non-controlling interests that total comprehensive income must be
attributed to the owners of the parent and to the non-controlling interests even if
this results in the non-controlling interests having a deficit balance(Transitional provision)- Treatment for non-controlling interests with a deficit balance, treatment forchanges in the parent’s ownership interest in a subsidiary without loss of control,
and treatment for loss of control over a subsidiary are applied prospectively forthe year ended March 2011.

IAS 32Financial Instruments:
Presentation- Amendment of the classification of rights issues

IAS 36

Impairment of Assets- Amendment about cash-generating units for impairment testing of goodwill

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

13

IFRSsIAS 39Subject of new standards/amendments and transitional provisions

Financial Instruments:
Recognition andMeasurement- Prohibition of the consideration of time value of money for option-type
derivatives in determining the hedging relationship- Treatment for loan prepayment penalties as closely related embedded derivatives- Scope exemption for business combination contracts- Amendment for cash flow hedge accounting

IFRS 2

Share-based Payment- Revision of IFRS 2 in accordance with the revision of IFRS 3 in 2008 on thedefinition of business combinations

IFRS 3Business Combinations- Amendment that on the date when control is obtained or lost, the entity’s shareto the acquiree should be remeasured at fair value, and changes in a parent’s
ownership interest in a subsidiary that do not result in a loss of control areaccounted for as equity transactions- Amendment to acquisition costs: costs are expensed as incurred(Transitional provision)- The standard is applied to the business combination for the year ended March2011 and is not applied retrospectively.

IFRS 5

Non-current Assets Held - Amendment to the treatment when a committed sales plan involves loss offor Sale and Discontinued control of a subsidiary
Operations- Clarification for disclosures for non-current assets (or disposed group) classified
as held for sale or discontinued operations

IFRIC 9Reassessment ofEmbedded Derivatives

IFRIC 16 Hedges of a Net
Investment in a Foreign
Operation- Amendment to the scope of IFRIC 9 for business combinations- Amendment to the restriction for companies that can hold hedging instruments

IFRIC 17 Distributions of Non-cash - Clarification that an entity should measure the dividend payable at the fair value
Assets to Ownersof the non-cash assets to be distributed- Clarification that an entity should remeasure the dividend liability at eachreporting date with changes recognised directly in equity- Clarification that an entity should recognise the difference between the carrying
amount of the assets distributed and the carrying amount of dividend payable inprofit or loss with a separate note disclosure

These standards and interpretations were applied in accordance with respective transitional provisions.
There are no standards that were early adopted by the Group.
These standards and interpretations have no significant impact for the year ended 31 March 2011. IAS
27 and IFRS 3 were not applicable and had no significant impact as comprehensive income attributable
to non-controlling interests was minor, respectively, for the year ended 31 March 2011. However, those
may have a significant impact on gain/loss of control of a subsidiary or business combination in the future.

14

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(3) Standards and interpretations in issue not yet adopted by the GroupAt the date of approval of the consolidated financial statements, the main standards and interpretations
that were in issue but not yet effective for mandatory adoption are as follows;
Mandatory
adoption(From
the yearbeginning)

To be adopted
by the Group Subject of new standards/amendmentfrom the year
endingPresentationof Financial
Statements

1 January
2011

March 2012

- Clarification on the presentation of each component ofequity in the statement of changes in equity

1 July 2012

March 2014

- Revision to the presentation of other comprehensive
incomeIAS 12

Income Taxes

1 January
2012

March 2013

- Introduction of a presumption, in measuring thedeferred tax relating to an asset, that recovery of thecarrying amount will, normally be, be through sale

IAS 19

Employee Benefits

1 January
2013

March 2014

- Revision to the treatment of actuarial gains or losses
eliminating the use of the ‘corridor’ approach and all
remeasurement results be recognised in OCI

IFRSs

IAS 1

- Revision to recognition of actuarial gains and losses tobe recognised in other comprehensive income- Revision to the calculation method for interest cost withthe removal of expected return on plan assets- Introduction of enhanced disclosures for defined
benefit plans
IAS 24

Related Party
Disclosures

1 January
2011

March 2012

- Partial exemption of disclosure for government-related
entities- Revision of the definition of related party

IAS 27

Separate Financial
Statements

1 July 2010

March 2012

- Clarification on the transition requirements foramendments to IAS 21, IAS 28 and IAS 31 arising as aresult of revised IAS 27 (2008)

1 January
2013

March 2016

- Transitional provisions for consolidated financial
statements to IFRS 10

IAS 28Investments in
Associates andJoint Ventures

1 January
2013

March 2014

- Amendments based on the publication of IFRS 10,
IFRS11 and IFRS 12

IAS 34

Interim Financial
Reporting

1 January
2011

March 2012

- Amendments to emphasise the disclosure principles
and to add further guidance, including additional
examples, to illustrate how to apply these principles

IFRS 3Business
Combinations

1 July 2010

March 2012

- Revision to measurement of non-controlling interests- Revision to un-replaced and voluntarily replaced sharebased payments transactions- Transition requirements for contingent considerationfrom a business combination that occurred before theeffective date of revised IFRS 3 (2008)

IFRS 7

Financial
Instruments:
Disclosures

1 January
2011

March 2012

- Revision to disclosures of the nature and extent of risks
associated with financial instruments

1 July 2011

March 2013

- Amendment on enhancing disclosures for transferredfinancial assets

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

15

IFRSsIFRS 9Financial
Instruments

Mandatory
adoption(From
the yearbeginning)

To be adopted
by the Group Subject of new standards/amendmentfrom the year
ending1 January
2013

March 2014

- Replacement of IAS 39 for classification of financial
assets measured either at amortised cost or fair valueon the basis of the business model and contractual cash
flows of the financial assets- Amendment to IAS 39 where investments in equity
instruments are measured at fair value throughother comprehensive income, only dividends on theinvestments are recognised in profit or loss. Where
financial instruments measured at fair value throughprofit or loss or amortised cost, all relating gains orlosses are recognised in profit or loss
- Prohibition on the recycling of amount presented inother comprehensive income to profit or loss
- Amendment that the changes in fair value of financial
liabilities designated at FVTPL due to
1. changes in the own credit risk
2. othershould be recognised directly in other comprehensive
income and in profit or loss, respectively.

IFRS 10

Consolidated
Financial
Statements

1 January
2013

March 2014

- Guidance for consolidated financial statements toinclude the definition of control

IFRS 11

Joint Arrangements 1 January
2013

March 2014

- Classification of joint arrangements as either joint
operations (combining the existing concepts of jointly
controlled assets and jointly controlled operations) or
joint ventures (equivalent to the existing concept of a
jointly controlled entity)- Requirement of the use of the equity method of
accounting for interests in joint ventures and theelimination of the proportionate consolidation method- The investor of a joint operaion must include inits financial statements its share of assets, liabilities,
revenues and expenses relating to the joint operation

IFRS 12Disclosure ofInterests in Other
Entities

1 January
2013

March 2014

- Requirements for disclosure items such as the nature ofand risks associated with interests in other entities andthe effects of those interests on the financial statements

IFRS 13

Fair Value
Measurement

1 January
2013

March 2014

- Establishment of a single framework for both financial
and non-financial items measured at fair value

IFRIC 13 Customer Loyalty
Programmes

1 January
2011

March 2012

- Clarification that when the fair value of award credits
is measured on the basis of the redemption value ofthe awards. The fair value of the award credits shouldtake into account the expected forfeitures as well as thediscounts or incentives that would otherwise be offeredto customers who have not earned award credits from an
initial sale

IFRIC 14 IAS 19 – The Limiton a Defined
Benefit Asset,
Minimum Funding
Requirements andtheir Interaction

1 January
2011

March 2012

- Amendment that an early payment of contribution tocover minimum funding requirements should be deemed
as economic benefits

March 2012

- Guidance on “debt-equity swap”.

IFRIC19

Extinguishing
1 July 2010
Financial Liabilities
with Equity
Instruments

The Group will apply the aforementioned standards and interpretations for the respective fiscal years.
The implications from adoption of these standards and interpretations have not yet been fully assessedby the Group, however, these standards and interpretations should have no significant impact on the
future consolidated financial statements of the Group, except for IFRS 9 “Financial Instruments”.

16

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report3. Significant accounting policies(1) Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except for certain
non-current assets and financial instruments measured at revalued amounts or fair value in principle.
The principal accounting policies are set out below.

(2) Basis of consolidation
1. Subsidiaries
The Group has adopted IAS 27 (2008) “Consolidated and Separate Financial Statements” for the year
ended 31 March 2011. The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company as at 31 March of each year. Control is achieved
where the Company has the power to govern the financial and operating policies of an entity so as toobtain benefits from its activities.
The operating results of the subsidiaries are included in the consolidated statement of comprehensive
income from the effective date the Group obtained control of the subsidiaries to the effective date theGroup lost control, as appropriate. Where necessary, adjustments are made to the financial statementsof subsidiaries to bring their accounting policies into line with those used by other members of theGroup. All intra-group transactions, balances, income and expenses are eliminated in full in preparing
consolidated financial statements.
Changes in an interest of a subsidiary without losing control are accounted for as equity transactions.
The carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes
in their respective percentage interests in the subsidiary. If there is a difference between the amount bywhich the non-controlling interests are adjusted and the fair value of the consideration paid or received,
the difference is recognised directly in equity and attributed to the owners of the parent.
If loss in control of a subsidiary occurs, the Group recognises in profit or loss any resulting difference ofthe following;
1. sum of the fair value of any consideration received and any investment retained in the former
subsidiary at its fair value
2. previous carrying amounts the assets (including goodwill), and liabilities of the subsidiary and any
non-controlling interests
Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Noncontrolling interests consist of those interests at the date of the original business combination and thenon-controlling share of changes in equity since the date of the combination. Due to the revision of
IAS 27 “Consolidated and Separate Financial Statements”, from the year ended 31 March 2011, total
comprehensive income is attributed to the owners of the Company and to the non-controlling interests
even if the results in the non-controlling interests is a deficit balance. Until 31 March 2010, the deficit
balance was allocated to the Company except to the extent that the non-controlling interests had abinding obligation and were able to increase their investment in the susidiary to cover losses.
2. Investments in associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiarynor an interest in a joint venture.
The results, and assets and liabilities of associates are incorporated in the consolidated financial
statements using the equity method of accounting, except when the investment is classified as assets
held for sale, in which case it is accounted for in accordance with IFRS 5 “Non-current Assets Held forSale and Discontinued Operations”.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report17Under the equity method, investments in associates are carried in the consolidated statement offinancial position at cost as adjusted for post-acquisition changes in the Group’s share of the net assetsof the associates, less any impairment in the value of individual investments.
Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term
interests that, in substance, form part of the Group’s net investment in the associate) are recognised only
to the extent that the Group has incurred legal or constructive obligations or made payments on behalfof the associate.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable
assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is tested
for impairment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities
and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss.
When a group entity transacts with an associate of the Group, profits and losses are eliminated to theextent of the Group’s interest in the relevant associate.

(3) Business combination
Business combinations are accounted for on the basis of IFRS 3 (2008) “Business Combination”, andacquisitions of subsidiaries and businesses are accounted for using the acquisition method. Any costs
directly attributable to the business combination are expensed as incurred. The acquiree’s identifiable
assets and liabilities are measured at their fair values at the acquisition date except for the following;• a deferred tax asset or liability arising from the assets acquired and liabilities assumed, and a liability(or asset, if any) related to the acquiree’s employee benefit arrangements:• a liability or an equity instrument related to the replacement of an acquiree’s share-based payment
awards with share-based payment awards of the acquirer: and• an acquired non-current asset or disposal group that is classified as held for sale at the acquisition
date in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”.
When the consideration transferred by the Group in a business combination includes assets or liabilities
resulting from a contingent consideration arrangement, the contingent consideration is measured
at its acquisition-date fair value and included as part of the consideration transferred in a businesscombination. Changes in the fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill.
Measurement period adjustments are adjustments that arise from additional information obtained during
the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts andcircumstances that existed at the acquisition date.
The changes in the fair value of the contingent consideration resulting from events after the acquisition
date are accounted for as follows;(a) Contingent consideration classified as equity shall not be remeasured and any subsequent settlement
shall be accounted for in equity.
(b) Contingent consideration classified as an asset or a liability is accounted for in accordance with IFRS
9, IAS 37, IAS 39 or other IFRSs as appropriate.
Goodwill is measured on the basis of the excess of the sum of the consideration transferred, theamount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously
held equity interest in the acquiree over the fair value of identifiable assets acquired, net of liabilities
assumed at acquisition date. Negative goodwill is recognised immediately in profit or loss as a bargain
purchase gain.

18

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s ReportNon-controlling interests in subsidiaries are reported in equity separately from the equity attributableto owners of the Company. Non-controlling interests are initially measured either at fair value or at the
non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable
net assets on a transaction-by-transaction basis.
When a business combination is achieved in stages, the Group’s previously held equity interest in
the acquiree is remeasured to the fair value at the acquisition date (i.e. the date when the Groupobtains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arisingfrom interests in the acquiree prior to the acquisition date that were previously recognised in othercomprehensive income are reclassified to profit or loss where such treatment would be appropriate ifthat interest were disposed of.
Goodwill arising from business combinations before the IFRSs transition date is measured at theircarrying amount after performing an impairment test in accordance with the previous Japanese GAAP.
Business combinations before the year ended 31 March 2010 were accounted for based on IFRS 3(2004).

(4) Foreign currencies
1. Foreign currency transactions
The individual financial statements of each group entity are presented in the currency of the primaryeconomic environment in which the entity operates (its functional currency). For the purpose of
the consolidated financial statements, the financial position, financial results and cash flows of eachgroup entity are presented in Japanese Yen which is the functional currency of the Company and thepresentation currency for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than theentity’s functional currency (foreign currencies) are translated at the rates of exchange prevailing at thedates of the transactions.
At the end of each reporting period, monetary items denominated in foreign currencies are retranslated
at the rates prevailing at that date. Non-monetary items carried at fair value that are denominatedin foreign currencies are retranslated at the rates prevailing at the date when the fair value wasdetermined. Exchange differences are recognised in profit or loss in the period. The exchange gain orloss is included in ‘other expenses’ in the consolidated statement of comprehensive income.
2. Financial statements of foreign operations
The assets and liabilities of foreign operations are translated into Japanese Yen at the foreign exchange
rates prevailing at the end of reporting period. The revenues and expenses of foreign operations aretranslated into Japanese Yen at the average rates of exchange for the year. Where there are material
fluctuations in exchange rates, the exchange rate at the transaction date is used. Foreign exchange
differences arising from translation are initially recognised as exchange differences on translation offoreign operations in other comprehensive income and accumulated in equity, which are reclassified
from equity to profit or loss on disposal of the net investment and included in ‘other expenses’ in the
consolidated statement of comprehensive income.

(5) Property, plant and equipment
The Group applies the cost model for measuring property, plant and equipment.
Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated
impairment losses. Properties in the course of construction for production, supply or administrative
purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment
losses. Cost includes the expenses directly attributable to the assets, the initial estimated costs relating
to scrap, removal and retirement, and, for qualifying assets, the borrowing cost for long-term project.
Depreciation of these assets commences when the assets are available for their intended use.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report19When significant components of property, plant and equipment are required to be replaced periodically,
the Group recognises such parts as individual assets to be depreciated with specific useful lives. Allother repair and maintenance costs are recognised in profits or losses as incurred.
Property, plant and equipment other than land and construction in progress are depreciated mainly ona straight-line basis over the following estimated useful lives. The estimated useful lives, residual values
and depreciation method are reviewed at each year end, with the effect of any changes in estimate
being accounted for on a prospective basis.
Buildings and structures
Machinery and carriers
Tools, equipment and fixtures

3-50 years
3-10 years
2-20 years

Leased assets are depreciated over their estimated useful lives where the transfer of the title of theassets by the end of the lease term is certain. Leased assets where the transfer of the title of the assets by
the end of the lease term is not certain are depreciated over their estimated useful lives or lease terms
whichever is shorter.

(6) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks
and rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held by the Group under finance leases such as machinery and carriers, furniture and fixtures,
tools, equipment and fixtures, are initially recognised as assets of the Group at their fair value at the
inception of the lease or the present value of the minimum lease payments, whichever is lower. The
corresponding liability to the lessor is included in the consolidated statement of financial position as‘Interest-bearing short-term debt’ or ‘Interest-bearing long-term debt’. Lease payments are apportioned
between finance costs and reduction of the lease obligation so as to achieve a constant rate of intereston the declining balance of the liability.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term.
Contingent rent is recognised as an expense in the period in which it is incurred.

(7) Intangible assets
The Group uses the cost model for measuring intangible assets. Intangible assets are carried at cost lessaccumulated amortisation and accumulated impairment losses.
1. Intangible assets acquired separately and intangible assets acquired in a businesscombination
Intangible assets acquired separately are carried at cost at the time of initial recognition. Intangible
assets acquired in a business combination and recognised separately from goodwill are initiallyrecognised at their fair value at the acquisition date (which is regarded as their cost), when these are
identifiable and their fair value is reasonably measured.
2. Internally-generated intangible assets - research and development expenses
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of
an internal project) is recognised if, and only if, all of the following have been demonstrated;(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;(b) the intention to complete the intangible asset and use or sell it;(c) the ability to use or sell the intangible asset;(d) how the intangible asset will generate probable future economic benefits;

20

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

(e) the availability of adequate technical, financial and other resources to complete the development
and to use or sell the intangible asset; and(f) the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenses
incurred from the date when the intangible assets first meet the recognition criteria listed above. The
assets are amortised over the estimated period in which the development costs are expected to be
recovered. If no future economic benefit is expected before the end of the life of assets, the residual
book value is expensed.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost lessaccumulated amortisation and accumulated impairment losses. Where no internally-generated
intangible asset can be recognised, development costs are recognised as an expense in the period inwhich it is incurred.
3. Amortisation of intangible assets
Amortisation is recognised on a straight-line basis over their estimated useful lives as follows. The
Group does not have any intangible assets with indefinite useful lives.
Patents
Technology
Customer List
Software

7-12 years
10-15 years
5-8 years
5 years

4. Derecognition of intangible assets
An intangible asset is derecognised on disposal or when no future economic benefits are expected fromuse or disposal. Gains or losses arising from derecognition of an intangible asset are recognised in profit
or loss when the asset is derecognised.

(8) Goodwill
Goodwill arising from a business combination is measured as the excess of the sum of the considerationtransferred, the amount of any non-controlling interests in the acquiree, and the fair value of theacquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-dateamounts of the identifiable assets acquired and the liabilities assumed.
Goodwill is not amortised but is reviewed for impairment at least annually. Goodwill is recorded at costless accumulated impairment losses on the consolidated statement of financial position.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating
units, or groups of cash-generating units, that are expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are tested for impairment
annually, or more frequently when there is an indication that the unit may be impaired. If therecoverable amount of the cash-generating unit is less than its carrying amount, the impairment
losses are allocated first to reduce the carrying amount of any goodwill allocated to the unit and thento the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
Impairment losses recognised for goodwill are not reversed in a subsequent period. On disposal of a
subsidiary, the attributable amount of goodwill is included in the determination of profit or loss on disposal.
The Group’s accounting policy for goodwill arising on the acquisition of an associate is described at “(2)Basis of consolidation – 2. Investments in associates” above.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report21

(9) Impairment of property, plant and equipment and intangible assets
At the end of each reporting period, the Group reviews the carrying amounts of its property, plant andequipment and intangible assets to determine whether there is any indication that those assets havesuffered impairment losses. If any such indication exists, the recoverable amount of the cash-generating
unit to which the asset belongs is estimated in order to determine the extent of the impairment losses (if any).
Where a reasonable and consistent basis of allocation can be identified, corporate assets (assets otherthan goodwill that contribute to the future cash flows of both the cash-generating unit under review andother cash-generating units) are also allocated to individual cash-generating units, or otherwise they areallocated to the smallest group of cash-generating units for which a reasonable and consistent allocationbasis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.
Where impairment losses subsequently reverse, the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimate of its recoverable amount, such that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment
losses been recognised for the asset (or cash-generating unit) in prior years. A reversal of impairment
losses is recognised immediately in profit or loss.

(10) Derivative financial instruments
Derivatives are initially recognised at fair value at the date the derivative contract is entered into and aresubsequently remeasured to their fair value at the end of each reporting period.
The Group uses forward exchange contracts to manage the foreign exchange exposure of recognised
financial assets or liabilities, or firm future transactions. The Group also uses interest rate swaps tomanage the exposure to interest rate risk arising from variable rate of interest-bearing debt. Hedge
accounting does not apply to these derivative transactions.
Details of derivative transactions are set out in Note 23 “Financial instruments”.

(11) Financial assets other than derivative financial instruments
1. Initial recognition and measurement
All regular way purchases or sales of financial assets, that require delivery of assets within the timeframe established by regulation or convention in the marketplace, are recognised and derecognised on
the trade date, and are initially measured at fair value, plus transaction costs.
Financial assets are classified into the following specified categories;• financial assets at fair value through profit or loss (FVTPL),• held-to-maturity investments,• loans and receivables and• available-for-sale financial assets
The classification depends on the nature and purpose of the financial assets and is determined at thetime of initial recognition.

22

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report2. Financial assets as FVTPL
Financial assets are classified as FVTPL when the financial assets are either held for trading or aredesignated as an FVTPL.
A financial asset other than a financial asset held for trading may be designated as an FVTPL upon initialrecognition if:(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency(accounting mismatch) that would otherwise arise; or(b) the financial asset forms part of a group of financial assets or financial liabilities or both, which ismanaged and its performance is evaluated on a fair value basis, in accordance with the Group’s
documented risk management or investment strategy, and information about the grouping isprovided internally on that basis; or(c) it forms part of a contract containing one or more embedded derivatives, and IAS 39 “Financial
Instruments: Recognition and Measurement” permits the entire combined contract (asset or liability)
to be designated as an FVTPL.
Financial assets as FVTPL are stated at fair value, with any gains or losses arising on remeasurement
recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend,interest or fair value gain or loss from evaluation on the financial assets and is included in the
consolidated statement of comprehensive income. Fair value is determined in the manner described in
Note 23. “Financial instruments”.
As at 31 March 2010 and 31 March 2011, the Group did not have financial assets designated as FVTPL.
3. Held-to-maturity investments
Financial assets except derivatives for which the Group has the positive intent and ability to hold to maturity
are classified as held-to-maturity investments. Held-to-maturity investments are measured at amortised costusing the effective interest method less any impairment, with revenue recognised on an effective yield basis.
As at 31 March 2010 and 31 March 2011, the Group did not have held-to-maturity investments.
The effective interest method is a method of calculating the amortised cost of a financial asset and of
allocating interest income over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts (the calculation reflects effective interest method including
premium or discount between the counterparty) through the expected life of the financial assets, or(where appropriate) a shorter period, to the net carrying amount on initial recognition.
4. Loans and receivables
Trade receivables, loans, and other receivables that are not quoted in an active market are classified asloans and receivables. Loans and receivables are measured at amortised cost using the effective interest
method, less any impairment. Principally, interest income is recognised by applying the effective interest rate.
5. Available-for-sale financial assets
Financial assets except derivatives, either designated as available-for-sale financial assets or notclassified as FVTPL, held-to-maturity investments or loans and receivables, are classified as available-forsale financial assets.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report23

Listed shares and listed redeemable notes held by the Group that are traded in an active market
are classified as available-for-sale financial assets and are stated at fair value. The Group also has
investments in unlisted shares that are not traded in an active market but that are also classified asavailable-for-sale financial assets and stated at fair value. Fair value is determined in the manner
described in Note 23. “Financial instruments”. Gains and losses arising from changes in fair value arerecognised in other comprehensive income and accumulated in accumulated other comprehensive
income (net gain or (loss) on revaluation of available-for-sale financial assets), with the exception of
impairment losses and foreign exchange gains and losses on monetary assets, which are recognised in
profit or loss.
Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss, thatwere previously accumulated in accumulated other comprehensive income (net gain on revaluation ofavailable-for-sale financial assets), is reclassified to profit or loss.
Dividends on available-for-sale financial assets (equity instruments) are recognised in profit or loss
when the Group’s right to receive the dividends is established. The fair value of available-for-salefinancial assets (monetary assets) denominated in a foreign currency is determined in that foreign
currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains
and losses that were recognised in profit or loss are determined based on the amortised cost of themonetary asset. Other foreign exchange gains and losses are recognised in other comprehensive income.
6. Impairment of financial assets
Financial assets, other than FVTPL, are assessed for indicators of impairment at the end of eachreporting period. Financial assets are considered to be impaired when there is objective evidence that,as a result of one or more events that occurred after the initial recognition of the financial asset, theestimated future cash flows of the investment have been affected.
For listed and unlisted equity investments classified as available-for-sale financial assets, a significant or
prolonged decline in the fair value of the security below its cost is considered to be objective evidenceof impairment.
For all other financial assets, including redeemable notes classified as available-for-sale financial assets
and finance lease receivables, objective evidence of impairment could include:(a) significant financial difficulties of the debtor; or(b) default or delinquency in interest or principal payments; or(c) a probability that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of financial assets, such as trade receivables, assets that are assessed not to be
impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidenceof impairment for a portfolio of receivables could include the Group’s past experience of collecting
payments, an increase in the number of delayed payments in the portfolio past the average credit periodof 90 days to 120 days, as well as observable changes in national or local economic conditions that
correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment loss recognised is thedifference between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the financial asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial
assets with the exception of trade receivables, where the carrying amount is reduced through theuse of an allowance account. When a trade receivable, including past-due receivable, is considered
uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against the allowance account. Changes in the carrying amount of theallowance account are recognised in profit or loss.

24

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s ReportWith the exception of available-for-sale financial assets (equity instruments), if, in a subsequent
period, the amount of the impairment loss decreases and the decrease can be related objectively toan event occurring after the impairment was recognised, the previously recognised impairment loss isreversed through profit or loss to the extent that the carrying amount of the investment at the date theimpairment is reversed does not exceed what the amortised cost would have been had the impairment
not been recognised.
In respect of available-for-sale financial assets (equity instruments), impairment losses previously
recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent
to an impairment loss is recognised in other comprehensive income.
7. Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows fromthe asset expire, or when it transfers the financial asset and substantially all the risks and rewards ofownership of the asset to another entity. If the Group retains substantially all the risks and rewards ofownership of a transferred financial asset, the Group continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds received.

(12) Inventories
Inventories are valued at the lower of cost and net realisable value. Net realisable value represents theestimated selling price for the inventories in the ordinary course of business, less all estimated costsof completion and costs necessary to make the sale. Costs, including purchase costs, process costs,
storage costs and all other costs incurred in bringing the inventories to present location and condition,
are assigned to inventories by mainly the weighted-average method. The production costs include anappropriate portion of fixed and variable overhead expenses.

(13) Cash and cash equivalents
Cash and cash equivalents comprise of cash on hand and bank deposits including term deposits. The
term deposits with original maturities of three months or less are deemed as cash equivalents since they
are readily convertible to cash without restriction.

(14) Assets held for saleNon-current assets and disposal groups are classified as held for sale if their carrying amount will berecovered principally through a sale transaction rather than through continued use. This condition isregarded as met only when the sale is highly probable and the non-current asset (or disposal group) isavailable for immediate sale in its present condition. Management must be committed to the sale, whichshould be expected to qualify for recognition as a completed sale within one year from the date of classification.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets
and liabilities of that subsidiary are classified as held for sale when the criteria described above are met,
regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale.
Assets classified as held for sale are measured at the lower of their previous carrying amount and fairvalue less costs to sell. Property, plant and equipment and intangible assets classified as held for sale are
not depreciated or amortised after their classification.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report25

(15) Treasury shares
The Group’s own equity instruments which are reacquired (treasury shares) are recognised at cost anddeducted from equity. No gain or loss is recognised on the purchase, disposal or cancellation of theGroup’s own equity instruments. Any difference between the carrying amount and the consideration
given is recognised in other capital reserves.

(16) Share-based payments
Equity-settled share-based payments (stock option), which are incentive plans to Group’s directors,
officers and certain employees, are measured at the fair value of the equity instruments at the grant
date. Details regarding the determination of the fair value of equity-settled share-based transactions are
set out in Note 25 “Share-based payments”.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on astraight-line basis over the vesting period and other capital reserve is recognised, based on the Group’s
estimate of equity instruments that will eventually vest. At the end of each reporting period, the Grouprevises its estimate of the number of equity instruments expected to vest. The impact of the revision of
the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects therevised estimate, with a corresponding adjustment to other capital reserve.
Accounting policies described above are applied to share-based payments which were granted after 7
November 2002 and vested on or after 1 April 2008.

(17) Dividend Distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the consolidated
financial statements in the period in which the dividends are approved by the Company’s Board of Directors.

(18) Equity instruments and financial liabilities issued by the Group excluding derivative instruments
1. Equity instruments (shares)
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities.
2. Financial liabilities
Financial liabilities are classified as either financial liabilities as FVTPL or other financial liabilities.
3. Financial liabilities as FVTPL
Financial liabilities classified as FVTPL are either held for trading or designated as an FVTPL.
A financial liability is classified as held for trading if:(a) it has been acquired principally for the purpose of selling or redeeming it in the near term; or(b) on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or(c) it is a derivative that is not a financial guarantee contract and is not designated as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as an FVTPL upon
initial recognition if:(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency
that would otherwise arise; or

26

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(b) the financial liability forms part of a group of financial assets or financial liabilities or both, which
is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s
documented risk management or investment strategy, and information about the grouping isprovided internally on that basis; or(c) it forms part of a contract containing one or more embedded derivatives, and IAS 39 “Financial
Instruments: Recognition and Measurement” permits the entire combined contract (asset or liability)
to be designated as FVTPL.
Financial liabilities as FVTPL are stated at fair value, with any gains or losses arising on remeasurement
recognised in profit or loss. The net gain or loss recognised in profit or loss is included in financecosts in the consolidated statement of comprehensive income. Fair value is determined in the manner
described in Note 23 “Financial instruments”.
As at 31 March 2010 and 31 March 2011, the Group did not have financial liabilities measured as FVTPL
except for derivative transactions.
4. Other financial liabilities
Other financial liabilities, including bank loans, are initially measured at fair value, net of transaction
costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest
method, with interest expense recognised on an effective yield basis.
5. Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations aredischarged, cancelled or they expire.
6. Financial guarantee contract liabilities
Financial guarantee contract liabilities are initially measured at their fair values and subsequently
measured at the higher of:• the amount of the obligation under the contract, as determined in accordance with IAS 37 “Provisions,Contingent Liabilities and Contingent Assets”; and• the amount initially recognised less cumulative amortisation recognised in accordance with IAS 18“Revenue”.

(19) Retirement benefit costs
For defined benefit plans, the cost of providing retirement benefits is determined using the projected
unit credit method, with actuarial valuations being carried out at the end of each reporting period.
Actuarial gains and losses as at the end of the prior year are amortised over the expected averageremaining working lives (mainly 10 years) of the participating employees.
Past service cost is recognised immediately to the extent that the benefits are already vested. The
Group’s defined benefit plans are mostly closed pension funds and benefits are already vested.
Accordingly, past service costs for those funds are immediately recognised in profit or loss.
The retirement benefit obligation recognised in the consolidated statement of financial position
represents the present value of the defined benefit obligations as adjusted for unrecognised actuarial
gains and losses, and as reduced by the fair value of plan assets.
Contributions to defined contribution plans are recognised as an expense when these are paid.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report27

(20) Provisions, and contingent liabilities assumed in a business combination
Provisions are recognised when the Group has a present obligation (legal or constructive) as a resultof a past event, it is probable that the Group will be required to settle the obligation by outflow ofresources embodying economic benefits, and a reliable estimate can be made of the amount of theobligation. The amount recognised as a provision is the best estimate of the consideration required tosettle the present obligation at the end of the reporting period (future cash outflow), taking into accountthe risks and uncertainties surrounding the obligation.
Where time value of money is important, a provision is measured by its present value to which
estimated future cash flows are discounted using a pre-tax discount rate that reflects the risks specific to
the provision. Interest cost associated with the passage of time is recognised as finance cost.
The types of provisions are as follows;
1. Asset retirement obligation reserve
The Group recognises provisions for an asset retirement obligation reserve for estimated costs arisingfrom a contractual obligation to a landlord to dismantle and remove leasehold improvements from aleased office at the end of the lease contract, and estimated costs to decontaminate certain fixed assets.
Provision is provided based on past experience of actual cost and considers each property individually.
The discount rate is mainly 2.25% and depends on the useful life and the country. Future expected
timing of outflow of economic benefits is mainly more than one year from each reporting period.
2. Warranties provision
The provision is estimated and recognised based on past experience of the occurrence of defective
goods such as camera and glasses and the expected after service costs in the warranty period. Expected
outflow of economic benefits in the future is within one year from each reporting period.
3. Contingent liabilities assumed in a business combination
Contingent liabilities resulting from a business combination are initially measured at fair value atthe date of acquisition. Subsequent to initial recognition, such contingent liabilities are remeasured
considering expected future payments, possible occurrence and timing of payments at each reporting period.

(21) Revenue
Revenue is recognised at fair value of the consideration received or receivable less discount, rebate andconsumption taxes.
As for customers’ earning points upon their purchase under customer loyalty programmes, fair value ofthe points earned is estimated and accounted for as a reduction in revenue.
1. Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied;(a) the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;(b) the Group retains neither continuing managerial involvement to the degree usually associated withownership nor effective control over the goods sold;(c) the amount of revenue can be measured reliably;(d) it is probable that the economic benefits associated with the transaction will flow to the Group; and(e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Specifically, revenue is recognised when the risks and rewards of ownership of the goods transfersfrom the Group to the customer at the time of shipment, customer receipt, or upon customer approval
depending on the terms of sale.

28

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report2. Rendering of services
Services provided by the Group are mainly related to the products sold by the Group, including repairs
and short term maintenance. Generally, revenue from rendering of services is recognised when theservices have been provided to the customer.
3. Dividend and interest income
Dividend income from investments is recognised when the shareholder’s right to receive payment has
been established. Interest income is recognised based on principal and effective interest rate on an
accrual basis.

(22) Government grants
Government grants are measured and recognised at fair value when there is reasonable assurance that
the Group will comply with the conditions attaching to them and that the grants will be received.
Government grants associated with an expense are recognised as revenue in the same accounting
period when the expense is incurred. Government grants for purchase of assets are recognised asdeferred revenue in the consolidated statement of financial position and transferred to profit or loss ona systematic basis over the useful lives of the related assets.

(23) Taxation
Income tax expense represents the sum of the current tax and deferred tax. Current and deferredtaxes are recognised in profit or loss, except when they relate to items that are recognised directly inother comprehensive income or equity, or where they arise from the initial accounting for a businesscombination.
The current tax is calculated based on estimated refund or payment from/to taxation authorities. The
Group’s current tax liability is calculated using tax rates that have been enacted or substantively enacted
by the end of the reporting period based on the taxable profit or loss for the Group’s operating activity
in each country.
Deferred tax is provided using the liability method on temporary differences, tax loss carry forward andtax credits at the reporting date.
Deferred tax assets or liabilities are not recognised for the following;• Temporary differences of goodwill• Temporary differences resulted from initial recognition of transactions that do not affect accounting
income and taxable income (exclude business combination) of assets/liabilities• Taxable temporary differences associated with investments in subsidiaries and associates where
the timing of the reversal of the temporary differences can be controlled and it is probable that thetemporary differences will not reverse in the foreseeable future.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets
arising from deductible temporary differences are only recognised to the extent that it is probable that
there will be sufficient taxable profits against which to utilise the benefits of the temporary differences
and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all orpart of the asset to be recovered. Unrecognised deferred tax assets are reassessed at each reporting date
and are recognised to the extent that it has become probable that future taxable profits will allow thedeferred tax assets to be recovered.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report29Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have beenenacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when they relate to income taxes levied by the same tax authority.
In the case of a business combination, the tax effect is included in the accounting for the businesscombination, when measuring the amount of goodwill, or determining negative goodwill.

(24) Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable toordinary equity holders of the parent by the weighted-average number of ordinary shares outstanding
during the year.
Diluted earnings per share amounts are calculated by adjusting profit or loss attributable to ordinary
equity holders of the parent and the weighted-average number of ordinary shares outstanding, for theeffect of all potential dilutive ordinary shares.

30

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report4. Critical accounting judgements and key sources of
estimation uncertainty(1) Application of estimates and assumptions
Preparation of consolidated financial statements requires management to make estimates andassumptions in order to determine the reported amounts of certain assets, liabilities, income andexpense items, as well as certain amounts disclosed in the notes to the consolidated financial statements
relating to contingent liabilities.
The following are items that require estimates and assumptions and are considered significant;• Determination of net realisable value of obsolete inventory (Note 13 “Inventories”)• Expected cash flow from overdue trade and other receivables (Note 23 “Financial instruments”)• Useful lives of property, plant and equipment, including assets under finance lease (Note 3“Significant accounting policies”, Note 3 (5) “Property, plant and equipment” and Note 3 (6) “Leases”)• Assumptions used to estimate future cash flows of cash-generating units to assess the recoverability ofproperty, plant and equipment and intangible assets, including goodwill (Note 8 “Impairment losses”)• Valuation techniques used to value available-for-sale financial assets without an active market (Note23 “Financial instruments”)• Recoverability of deferred tax assets (Note 10 “Income taxes”)• Assumptions used for treatment of retained earnings of overseas subsidiaries and associates for tax
purposes (Note 10 “Income taxes”)• Discrepancy in opinion with a tax authority relating to tax calculations (Note 10 “Income taxes”)• Assumptions used to calculate retirement benefits obligation (Note 19 “Retirement benefit plans”)• Asset retirement obligations arising from legal obligations and constructive obligations (Note 20“Other provisions”)• Fair value of stock options (Note 25 “Share-based payments”)• Possibility of outflow of resources embodying economic benefits on contingent liabilities (Note 36“Contingent liabilities”)
The estimates and underlying assumptions are based on historical experience and other factors that areconsidered to be relevant. Actual results may differ from those estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis.
Revisions of the accounting estimates will impact current and/or future periods.

(2) Key sources of risk and estimation uncertainty
The Group’s financial position, financial performance and cash flows are exposed to the following risks
and uncertainties;• Tough competition and excess-supply of inventory in the markets the Group belongs to• Development of new products and timing of development• Changes in the political, economic and regulatory environment, shortage of labour, labour strike,natural disasters, and impact of unexpected international affair in the countries the Group belongs toand operates in• Fluctuation of currency exchange rates• The trend of environmental and governmental regulation
Estimated loss on disaster arising from the Great East Japan Earthquake on 11 March 2011 is basedon the information and knowledge obtained by the Group. Due to uncertainty, actual losses of thefollowing may differ from the current estimate;• Loss on physical damage of property, plant and equipments and inventories (Note 6 “Property, plantand equipment” and Note 13 “Inventories”)• Inspection costs and removal costs of damaged assets (Note 26 “Revenue and expenses (excluding
finance income and costs)”)• Restoration costs of damaged assets (Note 26 “Revenue and expenses (excluding finance income and costs)”)• Financial deterioration in customers (Note 23 “Financial instruments” (6) Credit risks)

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

31

The global economic stagnation and the disaster arising from the 11 March 2011 earthquake may havea significant impact on future profitability of the Group. Future profitability of the Group may affect theestimates for the following;• Impairment of property, plant and equipment and intangible assets including goodwill (Note 8“Impairment losses”)• Recoverability of deferred tax assets (Note 10 “Income taxes”)

32

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

5. Operating segment information(1) Overview of major products and services of reportable segments
The reportable segments 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 operating decision maker,
to determine the allocation of management resources and evaluate the business performance.
In accordance with its management philosophy, the Group has categorised “information technology”
and “life and culture” as its business domains. To achieve sustainable growth in corporate value in thesebusiness domains, the Group has been making decisions on the allocation of management resources
and monitoring the operating results.
As a result, the Group consists of three reportable business segments: the Information Technology
business, the Life Care business and Other business, which are consistent with the above business domains.
In the Information Technology business, the Group has developed an extensive range of products
following the digitalisation of information and the emergence of the internet. The Group produces
and sells a broad array of I/O (Input/Output Device) related products in the information andcommunication sector, including electronics related products that are essential for the modern digital
information and communication technologies, and imaging related products that are necessary toimport pictures and video images as digital information based on optical technologies.
In the Life Care business, the Group produces and sells health care related products that are used in
the health care and medical sectors and medical related products, including medical equipment andmedical materials that are used in medical treatments. In operating this business, it is typically required
to obtain approvals and permissions in accordance with the Pharmaceutical Affairs Act in Japan andother regulations, and sophisticated technologies and highly reliable quality control systems represent
the critical elements for operating this business.
Other business mainly includes the business that provides information system services and new businesses.
The main products and services for each “reportable segment” described above are as follows;
Reportable Segment

Major Products and Services

Information
Technology

Electronics
related products

Photomasks and Maskblanks for semiconductors,
Masks and Devices for liquid-crystal displays (LCDs)
Glass disks for hard disk drives (HDDs).

Imaging related
products

Optical lenses, Optical glasses,
Digital cameras, Interchangeable lenses,
Digital camera modules, Optical devices, Laser equipments.

Health Carerelated products

Eyeglass lenses, Contact lenses.

Medical related
products

Endoscopes, Intraocular lenses, Artificial bone, Medical accessories.

Life Care

Other

Design of information systems, other services.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report33

(2) Segment revenues and results
The following is an analysis of the Group’s revenue and results from continuing operations byreportable segment.
The accounting policies of the reportable segments are the same as the Group’s accounting policies
described in Note 3 “Significant accounting policies”.
(Millions of Yen)

For the year ended
March 2010

Information
Technology

Life Care

Other

Total

Revenue from externalcustomers

200,963

199,175

2,289

402,427

3

Adjustments

Consolidated

402,430

Inter-segment

122

22

3,880

4,024

(4,024)—

Total

201,085

199,197

6,169

406,451(4,021)

402,430

Interest income

336

223

8

567

257

824

Interest expense

(524)

(448)

(48)

(1,020)(1,312)(2,332)

Depreciation andamortisation(19,409)(10,765)(101)(30,275)(897)(31,172)

—

98

(8)

90

376

466

(133)

(127)

—

(260)

(574)

(834)

(148,848)(155,480)(5,983)(310,311)(8,557)(318,868)

32,50732,69837

65,242(14,728)

50,514

Capital expenditure

15,9089,367

109

25,384

1,728

27,112For the year ended
March 2011

Information
Technology

Life Care

Other

Total

Revenue from externalcustomers

208,735

203,006

1,584

413,325

24

413,349

Inter-segment

455

12

3,568

4,035

(4,035)—

Total

Share of profit(loss) of
associates
Impairment losses
OthersSegment profit before
tax
Other disclosure(Millions of Yen)

Adjustments

Consolidated

209,190203,018

5,152

417,360(4,011)

413,349

Interest income

338

175

9

522

339

861

Interest expense

(241)

(311)

(0)

(552)

(1,438)(1,990)Depreciation andamortisation(19,111)(10,661)(110)(29,882)(487)(30,369)

(8)

185

—

177

1,428

1,605

Share of profit(loss) of
associates
Impairment losses
OthersSegment profit before
tax—(1,944)—(1,944)—(1,944)(153,662)(153,719)(4,105)(311,486)(6,268)(317,754)

36,50636,743946

74,195(10,437)

63,75827,9239,371

85

37,379917

38,296

Other disclosure
Capital expenditure

34

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(Thousands of U.S.Dollars(Note 2))

For the year ended
March 2011

Information
Technology

Life Care

Other

Revenue from externalcustomers

2,510,338

2,441,440

19,058Total

Adjustments

Consolidated

4,970,836

291

4,971,127Inter-segment

5,473

147

42,911

48,531(48,531)—

Total

2,515,811

2,441,587

61,9695,019,367(48,240)

4,971,127Interest income

4,069

2,102

103

6,274

4,087

10,361

Interest expense(2,894)(3,739)(5)(6,638)(17,299)(23,937)

Depreciation andamortisation(229,838)(128,216)(1,323)(359,377)(5,851)(365,228)

Share of profit(loss) of
associates

(99)

2,226

—

2,127

17,176

19,303

Impairment losses—(23,379)—(23,379)—(23,379)(1,848,010)(1,848,689)(49,368)(3,746,066)(75,401)(3,821,467)

439,039441,892

11,376892,308(125,528)

766,780

335,816

112,698

1,024

449,538

11,032

460,570

OthersSegment profit before
tax
Other disclosure
Capital expenditure

Note:(i) Adjustments to revenue from external customers of 3 million yen and 24 million yen (291 thousand U.S.dollars) for the year ended
March 2010 and 2011, respectively, represent revenue by R&D department which is not included in any reportable segment.
(ii) Adjustments to segment profit before tax of (14,728) million yen consist of elimination of an inter-segment transaction of (21,124)
million yen, and profit or loss of the Company’s headquarters, R&D department and overseas holding companies of 6,396 million
yen for the year ended March 2010 and (10,437) million yen (125,528 thousand U.S.dollars) consist of elimination of intersegment transaction of (60,017) million yen (721,792 thousand U.S.dollars), and profit or loss of the Company’s headquarters, R&D
department and overseas holding companies of 49,580 million yen (596,264 thousand U.S.dollars) for the year ended March 2011.
(iii) Transfer prices between operating segments are on an arm’s length basis for the years ended 31 March 2010 and 2011, respectively.
(iv) In addition to the above, capital expenditures in discontinued operations for the years ended March 2010 and 2011 are 1,908 millionand 192 million yen (2,300 thousand U.S. dollars), respectively, and the total capital expenditures in the Group for the year ended
March 2010 and 2011 are 29,020 million yen and 38,488 million yen (462,870 thousand U.S.dollars), respectively.

(3) Revenue from major products and services
The following is an analysis of the Group’s revenue from continuing operations from its major products
and services for the years ended 31 March 2010 and 2011;(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))

For the year ended
31 March 2010

For the year ended
31 March 2011

For the year ended
31 March 2011

Information Technology
Electronics related products

99,111

110,737

1,331,770

Imaging related products

101,852

97,9981,178,568

Information Technology Total

200,963

208,735

2,510,338

147,580

152,254

1,831,074

Life Care
Health Care related products
Medical related products

51,59550,752

610,366

Life Care Total

199,175

203,006

2,441,440

2,289

1,584

19,0583

24

291

402,430

413,349

4,971,127

Other
Corporate (R&D)
Total revenue from external customers

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report35

(4) Information about geographical areas
Revenue from external customers(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))

For the year ended
31 March 2010

For the year ended
31 March 2011

For the year ended
31 March 2011

152,366

160,210

1,926,765

Japan
U.S.A.

43,92744,910540,114

China

37,14948,537583,734

Others168,988

159,692

1,920,514

402,430

413,349

4,971,127

Total
Note:
Geographical areas are based on the location of the customers.
Non-current assets(Millions of Yen)

(Thousands of U.S.Dollars(Note 2))

As at 31 March 2010

As at 31 March 2011

As at 31 March 2011

Japan

65,07058,603704,782

Thailand

19,586

19,555

235,181

Philippines

5,972

17,209206,964

OthersTotal

56,55341,042

493,589

147,181

136,409

1,640,516

Note:(i) Geographical areas are based on the physical location where non-current assets are located.
(ii) Financial instruments, deferred tax assets, and pension plan assets are not included.
Revenue from external customers in Thailand and Philippines is insignificant; therefore the amount is included in Others.
Non-current assets located in U.S.A.and China are insignificant; therefore the balance is included in Others.

(5) Information about major customers
The Group has no revenue from transactions with a single external customer that amounts to 10 percent
or more of revenue of the Group.

36

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report6. Property, plant and equipment
The following are the cost, accumulated depreciation and impairment losses of property, plant and equipment;(Millions of Yen)

Land

Total

44,625

15,147

13,363400,900

Machineryand carriers

80,741

247,024

Balance at 1 April
2009
Additions

Cost

Constructionin progress(iii)

Tools,
equipment
and fixtures

Buildings andstructures
(iv)

2,645

4,994

2,779

1,547

13,67525,640Acquisitions throughbusiness combinations

—

6

15

—

—

21

Sales and disposals (i)(1,923)(9,536)(2,916)

(519)

(385)

(15,279)

Transfer fromconstruction inprogress

1,001

11,514967—(13,482)—

Transfer to assets held
for sale(1,416)

—

—

—

—

(1,416)

Effect of foreign
currency exchange
differences

(7)

(131)

(23)

80

(239)

(320)

Others836(3,117)

(190)

—

(612)

(3,083)

Balance at 31 March
2010

81,877250,754

45,257

16,255

12,320406,463

Additions

1,085

3,495

3,369

2,940

28,76239,651Business transfer (ii)(562)

(32,962)

(114)

—

—

(33,638)

Sales and disposals (i)(1,241)(4,464)(2,111)

(708)

(82)

(8,606)

Transfer fromconstruction inprogress

3,543

19,662

1,487—(24,692)—

Effect of foreign
currency exchange
differences(3,097)(7,935)(1,879)

(152)

(688)

(13,751)577(1,233)(265)(1,378)(811)(3,110)82,182

227,31745,744

16,957

14,809387,009

OthersBalance at 31 March
2011

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report37

(Millions of Yen)

Accumulated
depreciation andimpairment losses

Buildings andstructures(iv)

Machineryand carriers

Tools,
equipment
and fixtures

Balance at 1 April
2009(41,790)(199,980)(28,045)

(304)

(283)

(270,402)

Depreciation expense(3,911)(22,283)(4,256)——(30,450)

Impairment losses (ii)

—

(194)

(9)

—

—

(203)

Sales and disposals (i)

1,196

9,186

2,617

—

283

13,282

Transfer to assets held
for sales

1,034

—

—

—

—

1,034

Effect of foreign
currency exchange
differences

(34)

206

(15)

—

—

157

OthersLand

Constructionin progress
(iii)

Total

72

1,728

522

—

—

2,322

Balance at 31 March
2010(43,433)(211,337)(29,186)(304)—(284,260)

Depreciation expense(3,852)(19,066)(4,555)——(27,473)

Impairment losses (ii)

—

—

—

(58)

—

(58)

Business transfer (ii)

175

25,725106——

26,006

Sales and disposals (i)

1,205

4,298

1,709

39

—

7,251

Effect of foreign
currency exchange
differences

1,317

6,187

1,367

—

—

8,871

Others

(61)

640

649

—

—

1,228

(44,649)(193,553)(29,910)(323)—(268,435)

Balance at 31 March
2011(Millions of Yen)

Carrying amount

Buildings
andstructures(iv)

Machineryand carriers

Tools,
equipment
and fixtures

Land

Constructionin progress
(iii)

Total

Balance at 1 April 2009

38,95147,044

16,58014,84313,080130,498

Balance at 31 March 2010

38,444

39,417

16,071

15,951

12,320122,203

Balance at 31 March 201137,53333,764

15,834

16,634

14,809118,574(Thousands of U.S.Dollars(Note 2))38

Machineryand carriers

Tools,
equipment
and fixtures

Land

Constructionin progress
(iii)

Total

984,685

3,015,689

544,290

195,484

148,1634,888,311

Additions

13,04742,03040,522

5,941

345,904

447,444

Business transfer (ii)
Sales and disposals (i)(17,054)(53,681)(25,393)(8,516)(987)(105,631)(6,761)(396,411)(1,369)——(404,541)

Transfer fromconstruction inprogress

38,173228,378

17,980—(284,531)—

Effect of foreign
currency exchange
differences(35,119)(95,432)(22,598)(1,824)(8,275)(163,248)

Others11,386(6,759)(3,288)12,852(22,177)(7,986)

Balance at 31 March2011

988,357

2,733,814

550,144

203,937

178,097

4,654,349

Cost

Buildings andstructures(iv)

Balance at 31 March
2010

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(Thousands of U.S.Dollars(Note 2))

Accumulated
depreciation andimpairment losses

Buildings andstructures(iv)

Machineryand carriers

Tools,
equipment
and fixtures

Balance at 31 March
2010(522,346)(2,541,637)(351,010)

Depreciation expense(46,330)(229,292)(54,784)

Impairment losses (ii)

—

—

—

Constructionin progress
(iii)

Land

(3,652)

Total—(3,418,645)——(330,406)

(699)

—

(699)

Business transfer (ii)2,103

309,385

1,269

—

—

312,757

Sales and disposals (i)14,491

51,68820,547472—

87,198

Effect of foreign
currency exchange
differences

15,83774,403

16,440——106,680

(727)

7,696

7,827

—

—

14,796(536,972)(2,327,757)(359,711)(3,879)—(3,228,319)

OthersBalance at 31 March
2011(Thousands of U.S.Dollars(Note 2))

Carrying amount

Buildings
andstructures(iv)

Machineryand carriers

Tools,
equipment
and fixtures

Land

Constructionin progress
(iii)

Total

Balance at 31 March 2011

451,385

406,057

190,433

200,058

178,097

1,426,030

Note:(i) Gain and loss arising from sale or disposal of property, plant and equipment for the years ended 31 March 2010 and 2011 are set
out in Note 26 “Revenue and expenses (excluding finance income and costs)” . Gain and loss on sale of assets held for sale were
included in the above ‘gain on sale of property, plant and equipment’ and ‘loss on sale of property, plant and equipment’ in Note 26.
(ii) Details of impairment losses are set out in Note 8 “Impairment losses” and details of business transfer are set out in Note 28“Discontinued operations”.
(iii) Property, plant and equipment under construction are included in ‘construction in progress’ in the table above.
(iv) Building with carrying amount of 32 million yen (379 thousand U.S.dollars) has been pledged as collateral to secure 19 million yen(226 thousand U.S.dollars) ‘Interest-bearing long-term debt’ and 3 million yen (40 thousand U.S.dollars) ‘Interest-bearing short-term
debt’ as at 31 March 2011. Refer to Note 16 “Interest-bearing debt” for details.
(v) Details of commitments for the acquisition of property, plant, and equipment are set out in Note 37 “Commitments for expenditure”.
(vi) There is no borrowing cost capitalised and included in the cost of acquisition of property, plant and equipment.
The following are carrying amounts for property, plant and equipment under finance leases as at 31 March 2010 and 2011, which areincluded in each corresponding amount in the table above. Impairment losses are recognised on a part of leased assets;(Millions of Yen)

Buildings andstructures

Machinery andcarriers

Tools, equipment
and fixtures

Total

Balance at 31 March 2010

304

269

372

945

Balance at 31 March 2011

345

209

136

690
(Thousands of U.S.Dollars(Note 2))

Balance at 31 March 2011

Buildings andstructures

Machinery andcarriers

Tools, equipment
and fixtures

Total

4,153

2,509

1,642

8,304

The obligation under finance lease (Note 17 “Finance lease obligations”) is secured by the leased assets
on which the lessor has ownership.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report39

7. Goodwill and intangible assets
The following are the cost, accumulated amortisation and impairment losses of goodwill and intangible assets;(Millions of Yen)

Cost

Goodwill

Intangible assets
SoftwareTechnology

Patents

Others (i)

Total

2,693

11,926

8,235

11,983

5,272

37,416

—

1,579

—

—

2,053

3,632

3,011

—

—

167

645

812

—

(164)

—

—

(2,085)(2,249)Effect of foreign currency
exchange differences

(220)

(624)

—

(204)

(462)

(1,290)

Balance at 31 March 2010

5,484

12,717

8,235

11,946

5,423

38,321

Additions

—

1,206

—

—

94

1,300

Disposals (ii)

—

(299)

—

—

(94)

(393)

(504)

(399)

—

(26)

(327)

(752)

Balance at 1 April 2009
Additions
Acquisitions throughbusiness combinations
Disposals (ii)

Effect of foreign currency
exchange differences
Others

(923)

96

—

—

923

1,019

Balance at 31 March 2011

4,057

13,321

8,235

11,9206,019

39,495(Millions of Yen)

Accumulated amortisationand impairment losses

Goodwill

Intangible assets
SoftwareTechnology

Patents

Others

Total

Balance at 1 April 2009—

(8,380)(4,077)(3,824)(1,907)(18,188)

Amortisation expense (iii)—(1,241)(489)(1,349)(425)(3,504)

Disposals (ii)

—

152

—

—

47

199

Effect of foreign currency
exchange differences

—

591

—

115

248

954

Balance at 31 March 2010—

(8,878)(4,566)(5,058)(2,037)(20,539)

Amortisation expense (iii)—(1,381)(489)(1,296)(655)(3,821)

Impairment losses (iv)

(1,428)

—

—

—

(458)

(458)

Disposals (ii)

—

274

—

—

94

368

Effect of foreign currency
exchange differences

—

280

—

68

28

376

Others

—

(41)

—

—

(223)

(264)

(1,428)(9,746)(5,055)(6,286)(3,251)(24,338)

Balance at 31 March 2011

(Millions of Yen)

40

Carrying amount

Goodwill

Balance at 1 April 2009

2,693

Intangible assets
SoftwareTechnology

Patents

Others

Total

3,546

4,158

8,159

3,365

19,228

Balance at 31 March 2010

5,484

3,839

3,669

6,888

3,386

17,782

Balance at 31 March 2011

2,629

3,575

3,180

5,634

2,768

15,157HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(Thousands of U.S.Dollars(Note 2))

Intangible assets

Cost

Goodwill

SoftwareTechnology

Patents

Others (i)Total

Balance at 31 March 2010

65,953

152,941

99,036143,673

65,216

460,866

Additions—14,505

—

—

1,135

15,640

Disposals (ii)—(3,598)——(1,129)(4,727)(11,098)

1,150

—

—

11,097

12,247

Effect of foreign currency
exchange differences
Others(6,065)(4,798)—(318)(3,936)(9,052)

Balance at 31 March 2011

48,790160,200

99,036

143,355

72,383474,974(Thousands of U.S.Dollars (Note 2))

Intangible assets

Accumulated amortisationand impairment losses

Goodwill

SoftwareTechnology

Patents

Others (i)Total

Balance at 31 March 2010—

(106,769)(54,909)(60,829)(24,507)(247,014)

Amortisation expense (iii)—(16,612)(5,884)(15,589)(7,863)(45,948)(17,176)———(5,504)(5,504)

Disposals (ii)

—

3,298

—

—

1,130

4,428

Effect of foreign currency
exchange differences

—

(497)

—

—

(2,676)(3,173)

Others

—

3,369

—

821

326

4,516

(17,176)(117,211)(60,793)(75,597)(39,094)(292,695)

Impairment losses (iv)

Balance at 31 March 2011

(Thousands of U.S.Dollars (Note 2))

Carrying amount

Goodwill

Balance at 31 March 2011

31,614

Intangible assets
SoftwareTechnology

Patents

OthersTotal

42,98938,24367,75833,289182,279

Note:(i) ‘Others’ include capitalised development cost in the amount of 35 million yen as at 1 April 2009. Except for this, there were no
significant internally-generated intangible assets for the years ended 31 March 2010 and 2011.
(ii) Loss on disposal of intangible assets is set out in Note 26 “Revenue and expenses (excluding finance income and costs)” (5) Other
expenses.
(iii) Amortisation expense is included in the line item ‘Depreciation and amortisation’ in the consolidated statement of comprehensive
income.
(iv) Refer to Note 8 “Impairment losses” for details of impairment losses.

No intangible assets have been pledged as collateral to secure the debt. There is no restriction on legal
title of these assets.
The Group owns Technology and Patents for manufacturing of the medical related products. The
carrying amount of Technology is 3,180 million yen (38,243 thousand U.S.dollars) as at 31 March 2011(as at 31 March 2010: 3,669 million yen). The carrying amount of Patents is 4,883 million yen (58,727
thousand U.S.dollars) as at 31 March 2011 (as at 31 March 2010: 5,968 million yen). The remaining
useful lives of Technology are 6 years as at 31 March 2011(as at 31 March 2010: 7 years). The remaining
useful lives of Patents are 4 years as at 31 March 2011 (as at 31 March 2010: 5 years).

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report41

8. Impairment losses
The following are the details of impairment losses recognised.
Impairment losses have been included in the line item ‘Impairment losses’ in the consolidated statementof comprehensive income.
(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year
ended
31 March 2010

For the year
ended
31 March 2011

For the year
ended
31 March 2011

Buildings and structures (i)

57

—

—

Machinery and carriers

194

—

—

Tools, equipment and fixtures

9

—

—

Land

—

58

699

Subtotal losses on property, plant and equipment

260

58

699

Goodwill—

1,428

17,176

Intangible assets

—

458

5,504

Other non-current assets(Long-term prepaid
expenses)

574

—

—

834

1,944

23,379Total impairment losses

Note:(i) Buildings and structures were classified as assets held for sale in the previous year. Refer to Note 24 “Assets held for sale” for details.

(1) Cash-generating units
The Group identifies each business unit as cash-generating unit for impairment testing purposes. Eachbusiness unit has been set based on the production and sale of product lines. For any asset expected tobe sold or disposed, or any idle asset, an individual asset is tested for the necessity of impairment.

(2) Impairment losses on assets in business units
The assets impaired for the year ended 31 March 2010 are individual assets, not a cash-generating unit
subject to impairment test.
The Group performed impairment test on the goodwill and intangible assets acquired from thepurchase of Starion in April 2009. The impairment test is based on the current business plan. The
following impairment losses were recognised for the year ended 31 March 2011.
Recoverable amount was measured at the value in use and determined using cash flow projections
based on the financial budgets for the following five fiscal years which had been approved by theGroup’s management, and a discount rate of 15% per annum which is the Group’s pre-tax weighted
average capital cost (WACC).
(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

Impairment losses

Impairment losses

1,428

17,176

458

5,504

1,886

22,680Life Care
Medical related products (Endoscopes, Intraocularlenses, Artificial bone)
Goodwill
Intangible assets
Life Care Total

42

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(3) Impairment losses on assets to be sold or disposed, and idle assets
The carrying amount of assets to be sold or disposed of, and idle assets resulting from businessrestructuring, which were not expected to be used in the future, was written down to the estimatedrecoverable amount which was measured at fair value less related selling costs, and the corresponding
impairment loss was recognised. The fair value was based on appraisal or publicly posted land price.
For any asset to be disposed of, its recoverable amount was considered to be zero.
The following are impairment losses recognised for the year ended 31 March 2010;(Millions of Yen)

Impairment losses

Information Technology
Machinery and carriers

124

Tools, equipment and fixtures

9

Information Technology Total

133

Life Care
Buildings and structures (i)57

Machinery and carriers

70Life Care Total

127

Adjustments (Headquarters)
Other non-current assets

574

Adjustments (Headquarters) Total

574

Total

834

Note:
(i) These buildings and structures were classified as assets held for sale in the previous year.

Impairment losses were recognised as follows for the year ended 31 March 2011;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

Impairment losses

Impairment lossesLife CareLand (ii)58

699Life Care Total

58

699

Total

58

699

Note:
(ii) Refer to Note 24 “Assets held for sale”. The Group decided the sale of the land subsequent to the year ended 31 March 2011. The
sale was completed prior to the approval of the consolidated financial statements for the year ended 31 March 2011.

(4) Goodwill allocated to cash-generating units
When the recoverable amount of the goodwill specifically associated with a cash-generating unit islower than the carrying amount of such goodwill, an impairment loss is recognised and the goodwill is
written down to the recoverable amount. Recoverable amount of goodwill allocated to cash-generating
units was measured at the value in use and it was determined using cash flow projections based on
the financial budgets for the following five fiscal years which had been approved by the Group’s
management, and a discount rate of 11% to 15% per annum which is the cash-generating units’ pre-tax
weighted average capital cost (WACC).
Before recognising impairment losses, the carrying amount of goodwill was allocated to the cashgenerating units as follows;

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report43

(Millions of Yen)

As at 31 March 2010
Information
Technology

Life Care

Adjustments

Imaging related
products

Health Carerelated products

Medical related
products

Laser equipments,
etc.

Eyeglass lenses

Medicalaccessories

R&D

Total

Japan

—

—

—

—

—

Americas

108

1,200

2,852

35

4,195

Europe

—

824

—

—

824

Asia

—

465

—

—

465

108

2,489

2,852

35

5,484

Total

(Millions of Yen)

As at 31 March 2011
Information
Technology

Life Care

Adjustments

Imaging related
products

Health Carerelated products

Medical related
products (i)Laser equipments,
etc.

Eyeglass lenses

Medicalaccessories

R&D

Total

Japan

—

—

—

—

—

Americas

96

150

2,549

31

2,826

Europe

—

776

—

—

776

Asia

—

455

—

—

455

96

1,381

2,549

31

4,057

Total

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2011
Information
Technology

Japan
AmericasLife Care

Adjustments

Imaging related
products

Health Carerelated products

Medical related
products (i)Laser equipments,
etc.

Eyeglass lenses

Medicalaccessories

R&D

Total

—

—

—

—

—

1,159

1,804

30,655371

33,989Europe

—

9,328

—

—

9,328

Asia

—

5,473

—

—

5,473

1,159

16,60530,655371

48,790

Total

Note:
(i) Impairment loss on goodwill of Medical related products (Medical accessories) was recognised in the amount of 1,428 million yen(17,176 thousand U.S.dollars) for the year ended 31 March 2011.

44

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

9. Investments in associates
Details of the Group’s main associates are as follows;

Name of associate

Principal activity

Ownership interest (%)

Place ofincorporationand operation

Segment

As at 31
March 2010

As at 31
March 2011

Production and sale of
AVAN STRATE INC.
glass substrate for TFT JAPAN(i)
liquid crystal

Corporate

47.2

46.6

OPTOTAL HOYA
S.A

Production and sale of
BRAZILeyeglass lenses

Life care

25.0

25.0

PRIME OPTICS,
CO.,LTD.

Other

Other

50.0

50.0

—

49.0

JAPAN

JIASHAN CANDEO Production and sale of
OPTICAL GLASS
special glass, such as CHINA
CO.,LTD. (ii)coloured glass

Information Technology

Note:(i) The ownership interest of the Group decreased to 46.6%, resulting from the public offering on 29 June 2010.
(ii) The company was incorporated on 19 May 2010.

Summarised financial information in respect of the Group’s associates is set out below.
(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at / for the year
As at / for the year
As at / for the year
ended 31 March 2010 ended 31 March 2011 ended 31 March 2011

Total assets

169,670

173,199

2,082,975

Total liabilities(131,662)(130,229)(1,566,193)

Net assets

38,00842,970516,782Group’s share of net assets of associates

9,214

11,247135,263

Total revenue

49,37956,884684,116

Total expense

48,43852,970637,040

Total profit for the period

941

3,914

47,076

Group’s share of profit of associates

466

1,605

19,303

Note:
There are no quoted stock prices available for associates.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report4510. Income taxes(1) Deferred taxes
Detail of the deferred tax assets and liabilities are as follows;(Millions of Yen)

As at 1 April
2009

Recognised
in profit orloss

Recognisedin othercomprehensive
incomeAcquisitions ofsubsidiaries

As at 31 March2010

Temporary differences
Enterprise tax payable

284

(197)

—

—

87

Written down inventories

2,833

(720)

—

—

2,113

Allowance for doubtful
accounts

715

(392)

—

—

323

Other provision

669

(77)

—

—

592

Accrued expenses

3,406

539

—

—

3,945

Unrealised profit oninventories

1,764

119

—

—

1,883

Depreciation expense

3,544

368

—

—

3,912

Tax goodwill

13,711(4,534)

—

—

9,177

Impairment losses

3,716(1,857)

—

—

1,859

37

—

(20)

—

17

Exchange differenceson translation of foreign
operations
Others

4,920

(998)

—

—

3,922

Sub total

35,599(7,749)(20)—

27,830

Undistributed retained
earnings of subsidiaries(2,482)

1,952

—

—

(530)

Depreciation expense(2,439)

(505)

—

—

(2,944)

Net loss on revaluation ofavailable-for-sale financial
assets

(10)

—

(44)

—

(54)

Others

(624)

258

—

—

(366)

(5,555)

1,705

(44)

—

(3,894)

16,940

3,015

—

777

20,732

148

(142)

—

—

6

Sub total

17,088

2,873

—

777

20,738

Total

47,132(3,171)(64)

777

44,674

Sub total
Tax losses carry forward
and tax credits
Tax losses carry forward
Tax credits

Note:
The difference between the amount of “Recognised in profit or loss” recognised in the above and “Deferred tax expenses” recognised in
Note 10 “Income taxes” (2) Income taxes, is due to foreign exchange fluctuations.

46

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(Millions of Yen)

As at 1 April
2010

Recognised
in profit orloss

Recognisedin othercomprehensive
income

As at 31 March2011

Temporary differences
Enterprise tax payable

87

(63)

—

24

Written down Inventories

2,113

(409)

—

1,704

323

(114)

—

209

Other provision

592

23

—

615

Accrued expenses

3,945

59

—

4,004

Unrealised profit on inventories

1,883

(589)

—

1,294

Depreciation expense

3,912

1,082

—

4,994

Tax goodwill

9,177(4,117)—

5,060

Impairment losses

1,859

(813)

—

1,046

17

—

704

721

Allowance for doubtful accounts

Exchange differences on translation offoreign operations

3,922

737

—

4,659

27,830(4,204)704

24,330

(530)

29

—

(501)

(2,944)313—(2,631)

Net loss on revaluation of available-for-salefinancial assets

(54)

—

(193)

(247)

Others

(366)

(922)

—

(1,288)(3,894)

(580)

(193)

(4,667)

20,732(4,708)—16,024

Others
Sub total
Undistributed retained earnings ofsubsidiaries
Depreciation expense

Sub total
Tax losses carry forward and tax credits
Tax losses carry forward

6

(6)

—

—

Sub total

20,738(4,714)—

16,024

Total

44,674(9,498)511

35,687

Tax credits

Note:
The difference between the amount of “Recognised in profit or loss” recognised in the above and “Deferred tax expenses” recognised in
Note 10 “Income taxes” (2) Income taxes, is due to foreign exchange fluctuations.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report47

(Thousands of U.S.Dollars (Note 2))

As at 1 April
2010

Recognised
in profit orloss

Recognisedin othercomprehensive
income

As at 31 March2011

Temporary differences
Enterprise tax payable

1,044

(756)

—

288

Written down inventories

25,411(4,914)—

20,497

Allowance for doubtful accounts

3,879(1,371)—

2,508

Other provision

7,125

269

—

7,394

Accrued expenses

47,443713—

48,156

Unrealised profit on inventories

22,644(7,083)—

15,561

Depreciation expense

47,04513,011—60,056

Tax goodwill

110,366(49,514)—60,852

Impairment losses

22,356(9,775)—

12,581

204

—

8,468

8,672

Exchange differences on translation offoreign operations
Others47,168

8,867—

56,035

334,685(50,553)8,468

292,600

Undistributed retained earnings ofsubsidiaries(6,374)347—(6,027)

Depreciation expense(35,408)

3,760—(31,648)(642)—(2,316)(2,958)(4,389)(11,100)—(15,489)(46,813)(6,993)(2,316)(56,122)249,327(56,613)—

192,714Sub total

Net loss on revaluation of available-for-salefinancial assets
Others
Sub total
Tax losses carry forward and tax credits
Tax losses carry forward
Tax credits

70

(70)

—

—

Sub total

249,397(56,683)—

192,714

Total

537,269(114,229)

6,152

429,192

Note:
The difference between the amount of “Recognised in profit or loss” recognised in the above and “Deferred tax expenses” recognised in
Note 10 “Income taxes” (2) Income taxes, is due to foreign exchange fluctuations.

48

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s ReportTax losses carry forward and deductible temporary differences for which deferred tax assets have notbeen recognised are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Tax losses carry forward
Deductible temporary differences
Total

12,603

11,495

151,565

1,201

1,445

17,388

12,696

14,048

168,953

The expiration date and amounts of tax losses carry forward for which deferred tax assets are notrecognised are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

2,518

Year 1

1,805

Year 2

605

213

2,562

Year 3703

1,229

14,781

Year 4

1,634

258

3,098

Year 5 or later

6,748

8,385

100,845

11,495

12,603

151,565

Total

30,279The aggregate amounts of temporary differences associated with undistributed retained earnings of thesubsidiaries for which deferred tax liabilities have not been recognised at 31 March 2010 and 2011 were
171,302 million yen and 49,457 million yen (594,789 thousand U.S.dollars), respectively. No liability has
been recognised in respect of these differences because the Group is in a position to control the timingof the reversal of the temporary differences and it is probable that such differences will not reverse in
the foreseeable future.
For the years ended 31 March 2010 and 2011, the Company incurred tax losses. The Company
recognised deferred tax assets on the tax losses as at 31 March 2010 and 31 March 2011 of 18,315million
yen, and 15,155 million yen (182,259 thousand U.S.dollars), respectively.
Both of these tax losses were incurred from the same business combination which was a temporary
factor. The Company concluded that the entire amount of the deferred tax assets relating to the businesscombination are recoverable using the estimated future taxable income based on the financial budgets
for the following five fiscal years which had been approved by the Group’s management.

(2) Income taxes
In Japan, the normal effective statutory tax rate is approximately 40.5% for the years ended 31 March2010 and 2011.
Current or deferred taxes at other tax jurisdictions are calculated by the tax rates generally applied tothose tax jurisdictions.
Details of current tax expense and deferred tax expense are as follows;

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report49

(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2010

For the year ended
31 March 2011

For the year ended
31 March 2011

Current year

7,258

5,441

65,432

Prior years

121

180

2,169

7,379

5,621

67,601

2,736

8,781

105,607

Current tax expense: (i)Total current tax expense
Deferred tax expense: (ii)
Recognition and reversal of temporary
difference

(76)

(61)

(735)

Total deferred tax expense

2,660

8,720

104,872

Total income tax expense

10,03914,341

172,473

Continuing operations

9,957

14,053

169,004

Discontinued operations

82

288

3,469

Changes in tax rates

Note:(i) ‘Current tax expense’ includes previously unrecognised tax benefits from tax losses carry forward, tax credits and deductible
temporary differences. These benefits were 1,366 million yen and 794 million yen (9,551 thousand U.S.dollars) for the years ended
March 2010 and 2011, respectively.
(ii) ‘Deferred tax expense’ includes previously unrecognised tax benefits from tax losses carry forward, tax credits, deductible temporary
differences, and expenses or benefits arising from write-downs of deferred tax assets or the reversal of previous write-downs ofdeferred tax assets. These effects increased the deferred tax expense by 1,404 million yen and 820 million yen (9,865 thousand
U.S.dollars) for the years ended March 2010 and 2011, respectively.

Adjustments from normal effective statutory tax rate to actual tax rate are as follows; the actual tax rate
represents the ratio of profit before tax and income tax expenses, for continuing operations.
For the year ended 31 March2010

For the year ended 31 March
2011

Effective statutory tax rate

40.5%

40.5%

Expenses not deductible for tax purposes

3.8%

2.9%

Effect of unrecognised deferred tax assets(0.4%)

0.8%

Impact of different tax rates applied to overseas
subsidiaries(23.5%)(21.1%)

Profit or loss on investments in associates(0.1%)(1.3%)

Impact of different tax rates for elimination of
unrealised profits on inventory

0.4%(0.6%)

Others

(1.0%)

0.8%

Actual tax rate

19.7%

22.0%

There was no effect on income tax resulting from dividends paid to shareholders.

50

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report11. Other financial assets and liabilities
Details of other financial assets and liabilities are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Other financial assets
Available-for-sale financial assets

3,366

3,591

43,19021,65742,909516,047

(628)

(493)

(5,933)Loans and receivables
Loans and receivables
Allowance for doubtful accounts

21,02942,416510,114

Total

24,39546,007553,304

Non-current assets total (long-term financial
assets)18,80919,043229,021

Current assets total (Other short-term financial
assets)

5,586

26,964324,283

Loans and receivables –net

(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Other financial liabilities
FVTPL financial liabilities (derivative
instruments)

392

763

9,179

Other financial liabilities measured atamortised cost

—

257

3,088

Total

392

1,020

12,267

Non-current liabilities total (Other long-term
financial liabilities)

7

197

2,374

385

823

9,893

Current liabilities total (Other short-term
financial liabilities)

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report5112. Other assets and liabilities
Details of other assets and liabilities are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Non-current: Other assets
2,801

1,603

19,279

161

31

372

2,962

1,634

19,651

Prepaid expenses

2,038

2,554

30,712

Advance payment

561

4,072

48,976

Refundable consumption taxes

2,362

2,182

26,242Others

2,504

1,040

12,501

7,465

9,848

118,431

Long-term prepaid expenses
Others
Total
Current: Other assets

Total(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Non-current: Other liabilities
1,703

1,198

14,413

1,703

1,198

14,413

Accrued salary/Accrued bonus/Accrued
vacation pay

10,397

10,670128,328

Other accrued expenses

11,795

12,500150,329

Advance received/Deferred revenue (i)

3,368

4,188

50,366

Accrued consumption taxes

1,272

1,339

16,108Deposit received and other
Total
Current: Other liabilities

2,763

1,859

22,34829,59530,556367,479

OthersTotal

Note:(i) Details of advance received and deferred revenue are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Advance received/Deferred revenue
Customer loyalty programmes
Government grants
OthersTotal

52

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

1,730

646

7,765

126

188

2,255

1,512

3,354

40,346

3,368

4,188

50,366

13. Inventories
Details of inventories are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Goods and products

30,897

26,825371,584

Work in progress

8,323

7,138

85,840Raw materials

13,00615,022

180,667

13,06010,608

127,577

61,214

63,665

765,668

682

590

7,091

Supplies
Total
Inventories expected to be sold after morethan 12 months

No inventories were pledged as collateral to secure debt.
The cost of inventories recognised as an expense during the years ended 31 March 2010 and 2011 was
222,654 million yen and 222,338 million yen (2,673,935 thousand U.S.dollars), respectively.
The cost of inventories recognised as expense in respect of write-down and the reversal of such writedown is as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2010

For the year ended
31 March 2011

For the year ended
31 March 2011

1,087

1,400

16,835(1)——

Amount of write-down
Amount of reversal of write-down

The reversal was mainly due to an upturn in the market.

14. Trade and other receivables
Details of trade and other receivables are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Accounts receivable

84,03778,781

947,454

Notes receivable

9,375

8,669

104,256

Other receivables

2,712

999

12,011

Allowance for doubtful accounts(1,826)(1,995)(23,988)

Total

94,29886,454

1,039,733

The credit terms for customers are set between 90 days to 120 days on average.
Refer to Note 23 “Financial instruments” for credit risk management and fair value of trade and other receivables.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report53

15. Cash and cash equivalents
Details of cash and cash equivalents are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Cash and cash equivalents
Cash and deposit

173,308

201,530

2,423,693

less time deposit over 3 months(5,370)(16,278)(195,771)(Total) Cash and cash equivalents at
consolidated statement of financial position

167,938

185,252

2,227,922

Cash and cash equivalents at consolidated
statement of cash flows

167,938

185,252

2,227,922

16. Interest-bearing debt
Details of interest-bearing debt are as follows;(Thousands of
U.S.Dollars (Note 2))(Millions of Yen)

As at 31
As at 31
As at 31
Interest
March 2010 March 2011 March 2011 rate (%) (i)DueLong-term bank loans (excluding current
portion)

1,830

456

5,490

0.14

2012-2021

Current portion of long-term bank loans

3,277

1,259

15,146

2.67

—

762

816

9,818

2.06

—

Bonds (ii)99,792

99,8391,200,708——

Long-term finance lease obligations (Note 17)

1,373

474

5,696

—

2012-2018

Short-term finance lease obligations (Note 17)

251

340

4,086

—

—

Interest-bearing debt Total

107,285

103,184

1,240,944

Non-current debt total

102,995

100,769

1,211,894

Current debt total

4,290

2,415

29,050

Short-term bank loans

Note:(i) Interest rates are based on the weighted-average rates that applied to the balances at the end of each fiscal years.
(ii) The summary of issuance conditions for bonds is as follows;

Company

Item

Issue Date

As at 31
March
2010

As at 31
March
2011

As at 31
March
2011

Interest
rate (%)

Collateral(Millions of
Yen)

Due

(Millions of
Yen)(Millions ofYen)(Thousandsof U.S.Dollars(Note 2))HOYA
Unsecured 11
CORPORATION bond(No.1) September
2007

39,942

39,965

480,636

1.42

—

20
September
2012

HOYA
Unsecured 11
CORPORATION bond(No.2) September
2007

24,941

24,954300,104

1.62

—

19
September
2014

HOYA
Unsecured 11
CORPORATION bond(No.3) September
2007

34,90934,920419,968

1.93

—

20
September
2017

99,792

99,8391,200,708

—

—

—

Total

—

—

The obligations under finance lease are secured by the leased assets for which the lessor has ownership.
Refer to Note 17 “Finance lease obligations”.
There is no debt with covenants as at 31 March 2011.
Details of the remaining contractual maturity for long-term borrowings and bonds, and fair values are
set out in Note 23 “Financial instruments”.

54

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report17. Finance lease obligations
Details of finance lease obligations are as follows;(Millions of Yen)

Minimum lease payments(Thousands of U.S.Dollars (Note 2))

Present Value of
Minimum
Lease Payments

Minimum
lease
payments

Present
Value of
Minimum
Lease
Payments

As at 31
As at 31
As at 31
As at 31
As at 31
As at 31
March 2010 March 2011 March 2010 March 2011 March 2011 March 2011

Amounts payable under financeleases:
262

345

251

340

4,152

4,086

1,211

460

1,147

422

5,534

5,067

Later than 5 years

245

63

226

52

755

629

Total

1,718

868

1,624

814

10,441

9,782

(94)

(54)

1,624

814

No later than 1 year
Later than 1 year but not later
than 5 years

Less—future finance charges
Present value of leaseobligations

(659)
1,624

814

Less—amount due for settlement
within 12 months

251

340

4,086

Amount due for settlement after
12 months

1,373

474

5,696

9,782

9,782

Basically, the Group has not entered into any new finance lease contract. The Group enters into a lease
contract only when it concludes that it has a number of advantages of having a lease arrangement
in respect of cost reduction or the avoidance of the risk associated with product obsolescence. The
average remaining lease term is approximately 3 to 4 years as at 31 March 2011.
Some lease contracts include renewal options or purchase options. However, there is no sub-lease
contract, contingent rent, escalation payments and specific limitations (such as dividends, additionalborrowing, and additional lease contract), included in these lease contracts.
The Group’s fair values of lease obligations are set out in Note 23 “Financial instruments”.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report55

18. Operating lease arrangements
Details of minimum lease payments and contingent lease payments for the period under operating leasearrangements are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2010

For the year ended
31 March 2011

For the year ended
31 March 2011

6,070

6,588

79,227

Minimum lease payments
Contingent rent
Total

189

238

2,870

6,259

6,826

82,097

The amounts above are included in the line item ‘Other expenses’ in the consolidated statement ofcomprehensive income.
Contingent rent related to rent contracts for stores at shopping malls are based on the stores’ sales
amounts.
As at 31 March 2010 and 2011, the maturity periods of the outstanding commitments undernon‑cancellable operating leases are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

No later than 1 year

1,026

765

9,204

Later than 1 year but not later than 5 years

1,576

1,138

13,686

347

200

2,400

2,949

2,103

25,290Later than 5 years
Total

Operating lease payments represent rentals payable by the Group for the land used for an office,building and machinery. The average remaining operating lease terms for those assets as at 31 March2011 are 13 years, 2 years and 1 year, respectively.
Some lease contracts include renewal options. However, there is no purchase option, sub-lease contract,
escalation payments or restrictions (such as dividends, additional borrowing, and additional lease
contract), included in these lease contracts.

56

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report19. Retirement benefit plans
The Group has contributory defined contribution plans and defined benefit plans, and non-contributory
defined benefit plans. For the accounting policies adopted by the Group for retirement benefit plans,
refer to Note 3 “Significant accounting policies (19) Retirement benefit costs”.
The Company and its domestic subsidiaries mainly have defined contribution plans. However, the planstaken over from PENTAX CORPORATION as a result of the merger are closed defined benefit plans andrepresent a significant portion of the Group’s retirement benefit obligations. Overseas subsidiaries havebenefit plans required by local law and regulations of each country. Unless a defined benefit plan isrequired by the laws of the country in which the overseas subsidiaries operate, a defined contribution
plan has been put into place.
The Group does not have retirement benefit plans other than pension plans and retirement allowances.

(1) Defined benefit plans
Pension plans carried forward from the merger with PENTAX CORPORATION included the following
three plans as at 1 April 2009 (As at 31 March 2011, only plans ① and ② are effective);
Details of each of the plans are as follows;③ Tax Qualified Pension
Plans(TQPP)① Retirement allowances② Defined benefit plans

Based on accumulated
points earned taking into
account qualification andemployment period. One
time retirement payment.

Based on accumulated
points earned during theduration of membership.

Based on qualifications
points and employment
period points earned.

Option for pension
plans

—

Selection available for amember with 20 years
or more participation.
For others, a one-time
retirement payment ortransfer to another plan.

Selection available if
employed over 20 years andretirement due to mandatory
retirement. For others, onetime retirement payment.

Survivors pension
benefits—

None (One-time payment
to survivor)

Upon death of a member, if
member employed for over
20 years or a pensioner, then,survivors benefit is paid.

Promised rate of return—

2.5% per annum

5.5% per annum

Benefit payment
frequency—

6 times annually

4 times annuallyPension benefits

With the enforcement of the Defined Benefit Corporate Pension Law of Japan in 2002, it is necessary
to either terminate the TQPP by March 2012 or to transfer plan members to a different pension plan.
PENTAX CORPORATION’s TQPP has continued to be effective subsequent to the merger in March
2008. On 1 October 2009, PENTAX division’s TQPP was transferred to the defined benefit plans,and, as a result of orders from tax authorities to terminate, PENTAX division’s TQPP was terminatedapproximately a year after the merger.
The amounts included in the consolidated statement of financial position arising from the Group’s
obligation in respect of its defined benefit plans are as follows;

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report57

(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Obligations under defined benefit plans(Funded)14,35814,314

172,151

Fair value of plan assets(8,418)(8,135)(97,834)

Total

5,940

6,179

74,317

Obligations under defined benefit plans(Unfunded)

4,673

4,262

51,254

Net actuarial gains not recognised(2,448)(2,333)(28,065)

Net liability arising from defined benefit plan
obligation

8,165

8,108

97,506

8,186

8,121

97,663

(21)

(13)

(157)

Balance in the consolidated statement offinancial position
Liability
Asset (Other non-current assets)

Amounts recognised in profit or loss in respect of these defined benefit plans are as follows;(Millions of Yen)

For the year ended
31 March 2010

Current service cost(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2011

665

859

For the year ended
31 March 2011

7,993

Interest cost

376

360

4,335

Expected return on plan assets

(185)

(115)

(1,387)

Actuarial losses

474

383

4,608

Past service cost

(63)

—

—

Losses on curtailment of the plan

159

—

—

1,620

1,293

15,549

1,313

(194)

(2,338)

Total
Actual return on plan assets

Movements in the present value of the defined benefit obligations are as follows;(Millions of Yen)

For the year ended
31 March 2011

For the year ended
31 March 2011

21,473

19,031

228,879

Current service cost

859

665

7,993

Interest cost

376

360

4,335

Actuarial (gains) losses

172

(142)

(1,712)

Past service cost

(63)

—

—

Gains on curtailment/settlement

(393)

—

—

Opening defined benefit plans obligation(3,470)(1,154)(13,878)

Foreign currency translation gain or loss

77

(184)

(2,212)

Closing defined benefit plans obligations

19,031

18,576

223,405

Benefits paid

Movements in the present value of the plan assets are as follows;

58(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2010HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2010

For the year ended
31 March 2011

For the year ended
31 March 2011

8,567

8,418

101,245

Opening fair value of plan assets

185

115

1,387

1,128

(310)

(3,725)

479

500

6,010

(1,973)(468)(5,641)32(120)(1,442)

8,418

8,135

97,834

Expected return on plan assets
Actuarial gains (losses)
Contributions from employer
Benefits paid
Foreign currency translation gain or loss
Closing fair value of plan assets

The Group expects to make a contribution of 563 million yen (6,771 thousand U.S.dollars) to thedefined benefit plans for the year ending 31 March 2012.
The major categories of plan assets are as follows;
As at 31 March 2010

As at 31 March 2011

Domestic equity instruments

21%

23%

Overseas equity instruments

35%

37%

Domestic debt instruments

10%

8%

Overseas debt instruments

18%

18%

General accounts at life insurance companies (guaranteed
return)11%

11%

Others

5%

3%

Total

100%

100%

The principal assumptions used for the purposes of the actuarial valuations were as follows;
As at 31 March 2010

As at 31 March 2011

Discount rate

1.5%

1.6%

Expected rate of return on plan assets

1.3%

0.0%

Expected rate of salary increase

7.4%

7.3%

For funded defined befit plan, the overall long-term expected rate of return is determined based on
the current and the future portfolio of the plan assets as well as the expected return and risk based on
historical return trends of various long-term investments.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report59Adjustments for fund status in the past three years were as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March2009

As at 31 March2010

As at 31 March2011

As at 31 March
2011

Present value of defined
benefit plans obligations

21,473

19,031

18,576

223,405

Fair value of plan assets(8,567)(8,418)(8,135)(97,834)

Fund deficit

12,906

10,613

10,441

125,571

Adjustments on plan liabilities

1,338

172

(142)

(1,712)Adjustments on plan assets(1,738)

1,127

(310)

(3,725)(2) Defined contribution plans
The total expense recognised was 1,448 million yen and 1,485 million yen (17,855 thousand U.S.dollars)
for the years ended 31 March 2010 and 2011, respectively.

(3) Severance payments
Under certain circumstances (such as retirement before the normal retirement date), additional
payments are made upon retirement. The total expense recognised was 1,931 million yen and 2,172
million yen (26,120 thousand U.S.dollars) for the years ended 31 March 2010 and 2011, respectively.

60

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report20. Other Provisions
Details of other provisions are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010

As at 31 March 2011

As at 31 March 2011

1,742

1,473

17,719Asset retirement obligation reserve
Warranties provision
Total
Non-current liabilities
Current liabilities

880

791

9,508

2,622

2,264

27,227

1,718

1,461

17,569

904

803

9,658

An analysis of the change in provisions is as follows;(Millions of Yen)

Asset retirement
obligation reserve

Warranty provision

Total

Balance at 1 April 2010

1,742

880

2,622

Provision for the year

91

791

882

Interest cost associated with passage of time

18

—

18

Reduction resulting from settlement for the year

(90)

(880)

(970)

Reduction resulting from reversal

(288)

—

(288)

Balance at 31 March 2011

1,473

791

2,264

Asset retirement
obligation reserve

Warranty provision

Total

Balance at 1 April 2010

20,94910,582

31,531

Provision for the year

1,097

9,508

10,605

221

—

221

Reduction resulting from settlement for the year

(1,085)(10,582)(11,667)

Reduction resulting from reversal(3,463)—(3,463)

Balance at 31 March 2011

17,7199,508

27,227(Thousands of U.S.Dollars (Note 2))

Interest cost associated with passage of time

Refer to Note 3 “Significant accounting policies (20) Provisions, and contingent liabilities assumed in abusiness combination” for explanation for each provision.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report6121. Trade and other payables
Details of trade and other payable are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010

As at 31 March 2011

As at 31 March 2011

Accounts payable

30,40834,270412,152

Notes payable, trade

1,955

1,837

22,097

766

613

7,366

14,12914,706

176,86421

7

80

47,27951,433

618,559

Processing cost payable
Other payables
Notes payable for capital investment
Total

Trade notes payable are due 120 days on average.
Accounts payable are due 30 to 60 days from the invoice date in Asia except for Japan, and due 90 to
120 days from the invoice date in Japan. Accounts payable in Europe and U.S.A. are mainly payable to
the Group entities, thus upon consolidation these trade accounts payable are eliminated. The Group
maintains the global fund pool at Japan, Europe and the U.S.A. to make payments within the due date.

62

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report22. Share capital and other equity items(1) Share capital and capital reserves
Number of
authorised
shares(Ordinary shareswith no par-value)

Balance at 1 April
2009

Number ofissued shares(Ordinary shareswith no par-value)

Number ofoutstanding
sharesSharecapitalCapitalreserves(Ordinary shareswith no par-value)(Millions of
Yen)(Millions of
Yen)

Share
capitalCapitalreserves(Thousandsof
U.S.Dollars(Note 2))(Thousandsof
U.S.Dollars(Note 2))

1,250,519,400

435,017,020

432,856,960

6,264

15,899Decrease (i)——(1,457,204)——

Balance at 31
March 2010

1,250,519,400

435,017,020

431,399,756

6,264

15,89975,336

191,204——

14,416————

1,250,519,400

435,017,020

431,414,172

6,264

15,89975,336

191,204

Increase (i)Balance at 31
March 2011

Note:(i) Increase or decrease in number of outstanding shares is due to increase or decrease in treasury shares.

(2) Treasury shares and other capital reserves
1. Treasury shares
AmountNumbers of shares(Millions of Yen)

Balance at 1 April 2009

2,160,060

7,985

Repurchase from opposing shareholders (i)1,525,000

3,271

1,884

4

Repurchase of odd-lot shares
Disposal of odd-lot shares to shareholders with odd-lot shares
Decrease on exercise of stock option
Balance at 31 March 2010
Repurchase from opposing shareholders (i)Disposal of odd-lot shares to shareholders with odd-lot shares
Decrease on exercise of stock option
Balance at 31 March 2011

Balance at 31 March 2010
Repurchase from opposing shareholders (i)Disposal of odd-lot shares to shareholders with odd-lot shares
Decrease on exercise of stock option
Balance at 31 March 2011

(80)

(0)

(69,600)(250)

3,617,264

11,010

2,816

6

(32)

(0)

(17,200)(52)

3,602,848

10,964

Numbers of shares(Thousands of U.S.Dollars(Note 2))

3,617,264

132,4142,816

70

Amount(32)(1)(17,200)(629)

3,602,848

131,854

Note:(i) Repurchase is based on the claim from opposing shareholders in accordance with the 1st clause of article 797th of the Companies
Act of Japan.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report632. Other capital reserves
Gain(loss) on resaleof Treasury shares

Stock option (i)Total(millions of Yen)(millions of Yen)

(Millions of Yen)

(4,742)

1,439(3,303)

(121)

(19)

(140)

Balance at 1 April 2009
Disposal of Treasury shares
Share-based payments

—

429

429

Balance at 31 March 2010

(4,863)

1,849(3,014)

Disposal of Treasury shares

(21)

(4)

(25)

Share-based payments

—

544

544

(4,884)2,389(2,495)

Balance at 31 March 2011

Gain (loss) on resaleof Treasury shares

Stock option (i)Total(Thousands of U.S.Dollars(Note 2))(Thousands of U.S.Dollars(Note 2))(Thousands of U.S.Dollars(Note 2))

Balance at 31 March 2010

(58,486)

22,237(36,249)

Disposal of Treasury shares

(260)

(48)

(308)

Share-based payments
Balance at 31 March 2011

—

6,542

6,542

(58,746)

28,731(30,015)Note:(i) Refer to Note 25 “Share-based payments” for details of Stock option.

(3) Retained earnings and dividends
Amount(Millions of Yen)

Balance at 1 April 2009

382,941

Profit for the year (Attributable to owners of the Company)

41,213

Dividends(28,135)

Balance at 31 March 2010

396,019

Profit for the year (Attributable to owners of the Company)

59,744

Dividends(28,041)

Balance at 31 March 2011

427,722Amount(Thousands of U.S.Dollars (Note 2))

Balance at 31 March 2010

64

4,762,704

Profit for the year (Attributable to owners of the Company)

718,512Dividends(337,236)

Balance at 31 March 2011

5,143,980

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s ReportDetails of dividends are as follows;

Date of resolution

Dividends per Dividends per
share
share
(U.S.Dollars (Note
(Yen)

2))

Total
Dividends(Millions of Yen)

Total
Dividends(Thousands of
U.S.Dollars (Note2))

28 May 200935

15,15030 October 200930

12,98631 May 2010

35

0.42

15,099181,588

5 Nov 2010

30

0.36

12,942

155,648

31 May 2011

35

0.42

15,099181,588

Record date

Effective date

31 March2009

1 June 2009

30 September 25 November
2009
2009
31 March2010

2 June 2010

30 September 30 November
2010
2010
31 March
2011

2 June 2011

Dividends payable are included in the line item of ‘Other current liabilities’ in the consolidated
statement of financial Position.

(4) Non-controlling interests
Amount(Millions of Yen)

Balance at 1 April 2009

1,774

Profit for the year (Attributable to non-controlling interests)

304

Translation differences for foreign operations (other comprehensive income)

13

Dividends(159)

Increase arising on newly acquired subsidiary

147

Decrease arising on additional acquisition of shares by the Company(864)

Others(21)

Balance at 31 March 2010

1,194

Profit for the year (Attributable to non-controlling interests)(165)

Translation differences for foreign operations (other comprehensive income)(43)

Dividends(69)

Decrease arising from a liquidation of subsidiaries(212)

Balance at 31 March 2011

705

Amount(Thousands of U.S.Dollars (Note 2))

Balance at 31 March 2010

14,364

Profit for the year (Attributable to non-controlling interests)(1,993)

Translation differences for foreign operations (other comprehensive income)
Dividends

(514)
(833)

Decrease arising from a liquidation of subsidiaries(2,544)

Balance at 31 March 2011

8,480

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report6523. Financial instruments(1) Capital risk management
The Group manages its capital for its continuous growth and to maximise the corporate value of the Group.
The capital structure of the Group is as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Interest-bearing debt

107,285

103,184

1,240,944

Less: Cash and cash equivalents

167,938

185,252

2,227,922

Net debt(60,653)(82,068)(986,978)

Equity358,749

377,541

4,540,477

In order to maximise the corporate value of the Group, cash flows have been a priority of the Groupmanagement. As at 31 March 2010 and 2011, the Group maintained cash and cash equivalents balancesin excess of interest-bearing debt balances. The Group is not subject to any externally imposed capital
regulation as at 31 March 2011.
Details of interest-bearing debt, cash and cash equivalents and equity are described in Note 16 “Interestbearing debt”, Note 15 “Cash and cash equivalents”, and Note 22 “Share capital and other equity items”, respectively.

(2) Significant accounting policies
Accounting policies and criteria for recognition of financial assets, financial liabilities and equity
instruments, basis of measurement and recognition of income and expenses are described in Note 3“Significant accounting policies”.

(3) Categories of financial instruments(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010 As at 31 March 2011 As at 31 March 2011

Financial assets
Loans and receivables
Trade and other receivables

94,29886,454

1,039,733

Other financial assets (ii)21,02942,416510,114

Available-for-sale financial assets (ii)Cash and cash equivalents

3,366

3,591

43,190167,938

185,252

2,227,922

392

763

9,179

Financial liabilities
FVTPL financial liabilities (derivative
instruments) (iii)
Financial liabilities measured at amortised cost
Trade and other payables

47,27951,433

618,559

Interest-bearing debt

107,285

103,184

1,240,944

—

257

3,088

Other financial liabilities (iii)Note:(i) The items above are not included in discontinued operations and disposal group held for sale. The Group does not have heldto-maturity investments or derivative instruments designated as hedging instruments. Likewise, the Group does not have financial
assets or financial liabilities valued using the fair value option.
(ii) Other financial assets and available-for-sale financial assets are included in ‘Long-term financial assets’ or ‘Other short-term financial
assets’ on the consolidated statement of financial position.
(iii) The financial liabilities designated as FVTPL (Derivative instruments) and other financial liabilities are included in ‘Other long-term/
short-term financial liabilities’ on the consolidated statement of financial position.

66

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(4) Financial risk management
In its operations, the Group is exposed to various financial risks. The Group undertakes risk
management steps to minimise the effects of these financial risks. In an effort to manage these risks, theGroup’s risk management approach is to eliminate the source of these risks or to minimise the risks thatare not avoidable.
The Group does not enter into or trade financial instruments, including derivative financial instruments,
for speculative purposes. There are certain cases in which the Group obtains additional borrowings
from financial institutions to react to temporary cash shortages or uses forward foreign exchange
contracts to sustain cash flows. The above financial risks are managed by the financial department of
the Group.

(5) Market risk management
The Group is exposed to risks arising from changes in the economic environment and financial markets.
The factors of the risk relating to financial markets are fluctuation risk of foreign currency, interest rate,
and fair value of equity instruments.
1. Foreign currency risk
1) Foreign currency risk management
As the Group’s businesses have expanded globally, foreign exchange fluctuations in particular Thai
Baht, Euro and U.S.dollar, have a significant impact on the Group’s financial results. If the Japanese yen
appreciates against these currencies, both sales and profit stated in Japanese yen might decrease eventhough sales and profit stated in local currencies have increased.
The Group intends to marry major currencies the Group uses (Euro, U.S.dollars and Yen) insettlements of receivables/payables resulting from operating activities. Specifically, the subsidiaries that
continuously conduct import or export transactions retain foreign currencies obtained from exports ofgoods for payables on imported supplies. This enables the Group to mitigate foreign currency risk. On
the other hand, the Company having multiple strategic business units (“SBU”) and conducting financeand dividend, and holding companies receiving dividends from their subsidiaries and distributing it to
the Company and/or other group companies, sometimes fall into disparity of foreign currency debtcredit balances in receivables, liabilities and/or bank deposits. This might cause significant gains orlosses on foreign exchange differences when the Yen appreciates or depreciates against U.S.dollars orEuro, or when Euro appreciates or depreciates against U.S.dollar.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report672) Foreign currency sensitivity analysis
The chart below shows the impact on the profit and equity in a case of a 1% appreciation of Yen against
the Thai Baht, Euro and U.S.dollar on the assumption that other currencies are held constant.
For the Year ended
31 March 2010

For the Year ended
31 March 2011

Average of exchange rate (Yen per each currency)
2.75

2.74

Euro

130.68112.61

U.S.Dollars

92.61

85.22

Thai Baht

(123)

(13)

Euro

(366)

(64)

U.S. Dollars

(93)

5

Thai Baht

(120)

(80)

Euro

(574)

(447)

U.S.Dollars

(150)

(91)

Thai Baht

Profit for the year (Millions of Yen)

Equity (Millions of Yen)

For the Year ended
31 March 2011

Profit for the year (Thousands of U.S.Dollars (Note 2))
Thai Baht

(156)

Euro

(773)

U.S. Dollars

57

Equity (Thousands of U.S.Dollars (Note 2))
Thai Baht

(964)

Euro

(5,376)

U.S.Dollars(1,091)

Note:
Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation of Yen. The amounts
above represent the impact on the consolidated financial statements of the Group resulting from foreign currency conversion, not the
impact on Group’s cash flows or operations themselves.

Likewise, the charts below show the impact in case of a 1% appreciation of functional currencies of
the Company and a holding company in the Group on their receivables/liabilities and bank deposits
denominated in foreign currency on the assumption that other currencies are held constant.

68

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report2)-1. Parent company (the Company)(Millions of Yen)Euro

U.S.Dollars

31 March 2010

31 March 2011

31 March 2010

31 March 2011

Trade and other receivables

(69)

(60)

(192)

(216)

Trade and other payables

0

0

96

77

Long-term financial assets

—

—

(24)

(36)

Cash and cash equivalents

(1)

(61)

(207)

(358)

Total

(70)

(121)

(327)

(533)

(Thousands of U.S.Dollars (Note 2))

Euro

U.S.Dollars

31 March 2011

31 March 2011

Trade and other receivables(726)(2,599)Trade and other payables

6925

Long-term financial assets

—

(426)

Cash and cash equivalents(733)(4,305)(1,453)(6,405)

Total

Note:
Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation of Yen. The 1%
depreciation of Yen has a positive impact in the same amount.
Intercompany receivables/payables are included in the calculation of the impact since they cause foreign exchange gain or loss in theprocess of translation.

2)-2. Holding company(Millions of Yen)

Yen
31 March 2010

U.S.Dollars
31 March 2011

31 March 2010

31 March 2011

Trade and other receivables

—

(7)

—

(2)

Trade and other payables

1

9

17

106

Long-term financial assets

—

—

(1)

(1)

Cash and cash equivalents

(7)

(5)

(75)

(65)

Total

(6)

(3)

(59)

38

(Thousands of U.S.Dollars (Note 2))

Yen

U.S.Dollars

31 March 2011

31 March 2011

Trade and other receivables

(78)

(20)

Trade and other payables

106

1,265

Long-term financial assets—(7)

Cash and cash equivalents

(66)

(778)

Total

(38)

460

Note:
Numbers in brackets mean the amount of negative impact on profit and equity resulting from a 1% appreciation of Euro. The 1%
depreciation of Euro has a positive impact in the same amount.
Intercompany receivables/payables are included in the calculation of the impact since they cause foreign exchange gain or loss in theprocess of translation.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report693) Currency derivatives
The Group’s policy generally does not permit the use of derivative instruments such as forward
foreign exchange contracts. However, in certain circumstances in which the use of such derivatives isdetermined to be beneficial, the Group can enter into contracts upon obtaining formal approval fromthe Chief Financial Officer (“CFO”) of the Group in accordance with its global headquarters approval process.
In order to economically hedge foreign currency exposures on intercompany receivables, payables anddividends, forward foreign exchange contracts are occasionally entered into. In these cases, the same
approval policy as stated above is adhered to.
The following are the details of the forward foreign exchange contracts at the end of each reporting period;(Millions of Yen)

For the year ended
Average
Foreign
31 March 2010
exchange rate currency (mil)Notional
value

Fair value

6,676

(372)

Forward foreign exchange contracts
Within one year
€Buy
(US$ Sell)

1.42(US$/€)€ 50.4(Millions of Yen)

For the year ended
Average
Foreign
31 March 2011exchange rate currency (mil)(Thousands of U.S.Dollars (Note 2))

Notional
value

Fair value

Notional
value

Fair value

Forward foreign exchange contracts
Over one year
US$Sell(€ Buy)0.75(€/US$)

$49.0

4,301

(197)

51,730(2,374)

Within one year
US$Sell(€Buy)€Buy(US$ Sell)

0.75(€/US$)
1.35(US$/€)$112.9

9,944

(550)

119,595(6,617)

€ 5.9

656

(15)

7,890

(175)

Note:
The fair values of forward foreign exchange contracts at the end of each reporting period are determined based on the forward
exchange rate at market.

70

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report2. Interest rate risk management
The Group has long-term floating interest rate borrowings assumed as a result of a businesscombination. The Group also assumed the related interest rate swap contracts to economically hedge
the interest rates on these borrowings. The majority of the interest-bearing debt is bonds with fixedinterest rates. The Group’s cash and cash equivalents exceed the interest-bearing debt, and currently the
impact of interest expense on the Group’s profit/loss is insignificant. Therefore, the Group considers theinterest rate risk not to be significant and has not performed a sensitivity analysis.
Under the interest rate swap contracts, the Group pays fixed interest and receives floating interest basedon the notional principal amounts. Considering the payment of interest on floating interest-bearing debt,
receipt of floating interest of interest rate swap contracts and payment of fixed interest rate, the longterm debt was considered to be provided at a fixed interest rate which minimises the risk of interest rate
fluctuations. The only interest rate swaps the Group holds are the ones assumed through the business combination.
The fair values of the interest rate swaps at the end of the reporting period were determined bydiscounting future net cash flows using market interest rates at the end of each reporting period.

The following table details the notional principal amounts of interest rate swaps, remaining terms of thecontracts and the average interest rate at the end of each reporting period;

Average contracted fixed rateof interest rate swaps

Notional principal amount

Fair value(Millions of Yen)

(Millions of Yen)

31 March 2010

31 March 2010

31 March 2010

Less than 1 year

2.04%

2,198

(13)

1 to 2 year

2.96%

375

(7)

Less than 1 year

Less than 1 year

Average contracted fixed rateof interest rate swaps

Notional principal amount

Fair value(Millions of Yen)

(Millions of Yen)

31 March 2011

31 March 2011

31 March 2011

2.96%

125

(1)

Average contracted fixed rateof interest rate swaps

Notional principal amount

Fair value(Thousands of U.S.Dollars (Note 2))(Thousands of U.S.Dollars (Note 2))

31 March 2011

31 March 2011

31 March 2011

2.96%

1,503

(13)

The interest rate swaps are settled on a semi-annual basis. The floating rate on the interest rate swaps isbased on TIBOR. The Group settles the net of the fixed and the floating interest rate. Hedge accounting
has not been adopted for the interest rate swaps.
3. Price risks management in equity instruments
The Group is exposed to equity price risks arising from equity instruments (listed shares). These
investments are held from a viewpoint of business strategy, not for short term trading purpose. The
Group does not sell these investments frequently and the Group periodically reviews the fair value ofthese instruments as well as the financial condition of investees.
The sensitivity analysis has been based on the exposure to the price of equity instruments (listed shares)at the end of the reporting period. If equity prices increase or decrease by 5%, accumulated othercomprehensive income (pre-tax) would change by 111 million yen and 129 million yen (1,548 thousand

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report71

U.S.dollars) as at 31 March 2010 and 2011, respectively, as a result of changes in fair value of the equity
instruments (listed shares).

(6) Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in a financial
loss to the Group. The Group manages its credit risk by setting credit limits which are approved by theauthorised personnel of each SBU.
Credit losses incurred in the past were very rare for the Information technology business that sells
mainly made-to-order items. Likewise, significant credit losses were not incurred in the past by theLife Care business since it sells goods and manufactured products to end consumers and medical
institutions. A division in the Life care business of selling goods to medical institutions and operating
wholesale business in certain countries has some past-due receivables due to the financial conditions of
those medical institutions or customers. Credit limits have been set for those customers to minimise theloss from a failure to collect the receivables.
Trade receivables consist of large number of customers across diverse industries and geographicalareas. The Group has neither significant credit risk exposure for a specific customer or customer groupcategorised by similarity, nor concentration of credit risk over 5% of total financial assets as at 31 March 2011.
1. Financial assets and other credit exposures
Except for the items below, the carrying amounts after impairment losses presented on the consolidated
financial statements are the maximum exposure for the Group’s credit risk without considering theappraised value of the related collateral.
(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

Maximum credit risk

Guarantee liabilities

As at 31 March 2010

As at 31 March 2011

As at 31 March 2011

1,632

1,405

16,901The Group does not hold any collateral or other credit enhancements to cover the risks disclosed above.
Details of guarantee liabilities are described in Note 36 “Contingent liabilities”.

72

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report2. Impaired or past-due financial assets
The following table provides the ageing details of the financial assets not yet due and the financial
assets past-due but not impaired at the end of the reporting period;(Millions of Yen)

Total

Within due
dateTrade and otherreceivables (Gross)

96,124

Allowance for doubtful
accounts

Overdue amounts
Within 30days

31 to 60days

61 to 90days

91 to 120
days

Over 120days

87,462

3,995

1,520

597

507

2,043

(1,826)

(420)

(83)

(70)

(91)

(115)

(1,047)

Trade and otherreceivables (Net)94,29887,042

3,912

1,450

506

392

996

Other financial assets(Gross)21,657

21,116

—

—

—

2

539

Allowance for doubtful
accounts

(628)

(164)

—

—

—

(2)

(462)

Other financial assets(Net)

21,02920,952

—

—

—

—

77

Trade and otherreceivables (Gross)88,44980,294

3,216

1,495

538

566

2,340

Allowance for doubtful
accounts(1,995)

(396)

(25)

(44)

(62)

(207)

(1,261)

Trade and otherreceivables (Net)86,454

79,898

3,191

1,451

476

359

1,079

Other financial assets(Gross)42,90942,575

2

—

1

—

331

Allowance for doubtful
accounts

(493)

(165)

—

—

(1)

—

(327)

Other financial assets(Net)

42,41642,410

2

—

—

—

4

Balance at 31 March 2010

Balance at 31 March 2011

(Thousands of U.S.Dollars (Note 2))

Total

Within due
date

1,063,721

Overdue amounts
Within 30days

31 to 60days

61 to 90days

91 to 120
days

Over 120days

965,648

38,672

17,984

6,476

6,803

28,138(23,988)(4,763)

(292)

(538)

(742)

(2,484)(15,169)

1,039,733

960,885

38,38017,446

5,734

4,319

12,969Other financial assets(Gross)516,047

512,035

20

—

17

—

3,975

Allowance for doubtful
accounts(5,933)(1,983)

—

—

(17)

—

(3,933)

Other financial assets(Net)

510,114510,052

20

—

—

—

42

Balance at 31 March 2011
Trade and otherreceivables (Gross)
Allowance for doubtful
accounts
Trade and otherreceivables (Net)

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report73The Group does not hold any collateral or other credit enhancements on the above financial assets.
The amount of 87,462 million yen for trade and other receivables (Gross) disclosed above at “within
due date” at 31 March 2010 includes the amount of 1,306 million yen for notes receivable which wererestructured with customers to support their reconstruction process.
Likewise, the amount of 80,294 million yen (965,648 thousand U.S.dollars) for trade and otherreceivables (Gross) disclosed above at “within due date” at 31 March 2011 includes the amount of 1,099
million yen (13,214 thousand U.S.dollars) for notes receivable which were restructured with customers
to support their reconstruction process.
In case of impairment on financial assets, the Group does not directly write off such assets by reducing
the carrying amount, but instead records an allowance for doubtful accounts. Movement in theallowance for doubtful accounts is as follows;(Millions of Yen)

Allowance for
Allowance for
doubtful accounts doubtful accounts(Non-current)(Current)

Total

Balance at 1 April 2009

2,683

548

3,231

Provision for the year

675

510

1,185

Reduction resulting from settlement for the year

(215)

(59)

(274)

(1,257)(371)(1,628)

(60)

(0)

(60)

Balance at 31 March 2010

1,826

628

2,454

Provision for the year

1,043

47

1,090

Reduction resulting from settlement for the year

(479)

(211)

(690)

Reduction for the year (reversal)

(311)

(50)

(361)

Reduction for the year (reversal)
Other (Interest cost on discount calculating andforeign exchange translation gain or losses)

Other (foreign exchange translation gains or losses)
Balance at 31 March 2011

(84)

79

(5)

1,995

493

2,488

(Thousands of U.S.Dollars (Note 2))

Allowance for
Allowance for
doubtful accounts doubtful accounts(Non-current)(Current)

Total

Balance at 31 March 2010

21,956

7,548

29,504

Provision for the year

12,540574

13,114

Reduction resulting from settlement for the year

(5,761)(2,535)(8,296)

Reduction for the year (reversal)(3,738)(602)(4,340)

Other (foreign exchange translation gains or losses)(1,009)948(61)

Balance at 31 March 2011

23,988

5,933

29,921The Group continuously monitors the financial status of customers which appear to represent a credit
risk in collecting receivables including restructured receivables. Based on this monitoring, the Group
sets the allowance for doubtful accounts considering the collectability of the receivables.
Because the Group operations are global, the credit risk is widely diversified among customers andthe Group does not depend on specific customers. Therefore the possibility of a chain-reaction of
bankruptcies at a certain customer is considered to be remote and the Group does not set additional
general allowance for doubtful accounts resulting from the consideration of this credit risk.

74

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report

3. Transfer of financial assets
The Group transferred some of its notes receivable to financial institutions before maturity on a
discounted basis. The Group is required to repurchase these notes in the event of a default. Accordingly,
the Group continues to recognise the full carrying amount of the notes receivable until maturity and the
cash proceeds received on the sale of the notes receivable is accounted for as a secured borrowing.
Notes receivable transferred that were outstanding at the end of the reporting period are as follows;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March2010

As at 31 March2011

As at 31 March
2011

428

628

7,556

Notes receivable transferred(7) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the CFO of the Group who is appointed
by the Board of Directors. Based on the instructions from the CFO, the financial headquarters of theGroup mainly manages the Group’s liquidity risk by maintaining an appropriate level of retained earnings
and credit facilities, and monitors the actual cash flows and forecasted cash flows. Temporary cash
shortages due to dividends or bonus payments are funded through the issuance of commercial paper.
The following table details the contractual maturity of its financial liabilities (including derivative
financial instruments) but excluding guarantee liabilities;(Millions of Yen)

Balance at 31 March
2010

Carrying
amountContractual Less thancash flows
1 year1 to 2years

2 to 3years

3 to 4years

4 to 5years

Over 5years

Non derivative
liabilities
Trade and otherpayables47,27947,27947,279

—

—

—

—

—

Long-term bank loans(excluding current
portion)

1,830

1,830

—

458

157

152

150

913

Current portion of
long- term bank loans

3,277

3,277

3,277

—

—

—

—

—

Short-term bank loans

762

762

762

—

—

—

—

—

Bonds

99,792100,000——

40,000—25,00035,000Long-term financelease obligations

1,373

1,373

—

667

260

137

83

226

Short-term financelease obligations

251

251

251

—

—

—

—

—

372

372

372

—

—

—

—

—

Derivative liabilities
Currency derivative
instruments
Interest rate swaps
Total

20

20

13

7

—

—

—

—

154,956

155,164

51,954

1,132

40,417289

25,23336,139HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report75

(Millions of Yen)

Balance at 31 March
2011

Carrying
amountContractual Less thancash flows
1 year1 to 2years

2 to 3years

3 to 4years

4 to 5years

Over 5years

Non derivative
liabilities
Trade and otherpayables

51,43351,43351,433

—

—

—

—

—

Long-term bank loans(excluding current
portion)

456

456

—

64

59

57

57

219

Current portion of
long- term bank loans

1,259

1,259

1,259

—

—

—

—

—

Short-term bank loans

816

816

816

—

—

—

—

—

99,839100,000—

40,000—25,000—35,000Long-term financelease obligations

474

474

—

194

111

72

45

52

Short-term financelease obligations

340

340

340

—

—

—

—

—

Other financial
liabilities

257

257

257

—

—

—

—

—

762

762

565

197

—

—

—

—

Bonds

Derivative liabilities
Currency derivative
instruments

1

1

1

—

—

—

—

—

Total

155,637

155,798

54,67140,455

170

25,129102

35,271

Balance at 31 March
2011

Carrying
amountContractual Less thancash flows
1 year1 to 2years

2 to 3years

3 to 4years

4 to 5years

Over 5years

Interest rate swaps(Thousands of U.S.Dollars (Note 2))

Non derivative
liabilities
Trade and otherpayables618,559

618,559

618,559

—

—

—

—

—

Long-term bank loans(excluding current
portion)

5,490

5,490

—

775

710

689

691

2,625

Current portion of
long- term bank loans

15,14615,14615,146

—

—

—

—

—

Short-term bank loans

9,818

9,818

9,818

—

—

—

—

—

1,200,708

1,202,646—

481,059—

300,661—

420,926

Long-term financelease obligations

5,696

5,696

—

2,330

1,338

862

537

629

Short-term financelease obligations

4,086

4,086

4,086

—

—

—

—

—

Other financial
liabilities

3,088

3,088

3,088

—

—

—

—

—

9,166

9,166

6,792

2,374

—

—

—

—

Bonds

Derivative liabilities
Currency derivative
instruments
Interest rate swaps
Total

13

13

13

—

—

—

—

—

1,871,770

1,873,708

657,502486,538

2,048

302,2121,228

424,180

Note:
Guarantee liabilities have been excluded from the above table as the likelihood of execution has been determined to be low. Assets andliabilities recognised as a result of undertaking derivative instrument transactions are presented on a net basis.

76

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s ReportTemporary cash shortages due to dividends or bonus payments are funded through the issuance ofcommercial paper.
The following are the details of financing method and financing status;(Millions of Yen)

As at 31 March 2010

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2011

As at 31 March 2011

Bank overdraft
Used
Unused
Total

—

—

—

46,00056,000673,482

46,00056,000673,482———

50,00050,000601,323

50,00050,000601,323

Commercial paper limit
Used
UnusedTotal

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report77(8) Fair value of financial instruments(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

As at 31 March 2010

As at 31 March 2011

As at 31 March 2011

Carrying
amountFair value

Carrying
amountFair value

Carrying
amountFair value

Other financial assets

21,02920,41642,41642,402

510,114509,949

Available-for-sale financial assets

3,366

3,366

3,591

3,591

43,19043,190Total

24,39523,78246,00745,993553,304

553,139

392

392

763

763

9,179

9,179

Long-term bank loans(excluding current portion)

1,830

1,824

456

424

5,490

5,105

Current portion of long-termbank loans

3,277

3,386

1,259

1,262

15,14615,178

Bonds

99,792

103,752

99,839102,474

1,200,708

1,232,401

Long-term finance leaseobligations

1,373

1,424

474

503

5,696

6,050

Short-term finance leaseobligations

251

257

340

347

4,086

4,170

106,915

111,035

103,131

105,773

1,240,305

1,272,083

AssetsLoans and receivables

Liabilities
FVTPL financial liabilities(derivative instruments)
Financial liabilities measured atamortised cost

Total

Note:
Of FVTPL financial assets and financial liabilities (derivatives), the fair values of forward foreign exchange contracts at the end of eachreporting period were determined based on the forward exchange rate at market.
The fair values of interest rate swaps were determined by discounting future net cash flows using a risk-free rate at the end of thereporting period taking into account the duration to maturity.
The fair values of loan receivables and other assets were determined by discounting future net cash flows using rates taking into accountthe estimated timing of payments and credit risk.
The fair values of listed shares included in available-for-sale financial assets were determined based on market prices at the end of eachreporting period. The fair values of shares of private companies included in available-for-sale financial assets were calculated by using areasonable method.
The fair values of long-term bank loans, bonds and finance lease obligations were determined by discounting future cash flows using
rates taking into account the estimated timing of payments and credit risk.

78

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(9) Fair value measurements recognised in the consolidated statement of financial
position
The following table provides an analysis of financial instruments that have been measured at fair value
subsequent to initial recognition;
The fair values are categorised into Levels 1 to 3.
・Level 1; fair value measurements are those derived from quoted prices (unadjusted) in active markets

for identical assets or liabilities.

・Level 2; fair value measurements are those derived from inputs other than quoted prices included

within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly(i.e. derived from prices).
・Level 3; fair value measurements are those derived from inputs for the asset or liability that are notbased on observable market data (unobservable inputs).
Financial instruments valued at fair value are as follows;(Millions of Yen)

As at 31 March 2010

Available-for-sale financial assets

Level 1

Level 2

Level 3

Total

2,212

500

654

3,366

Total

2,212

500

654

3,366

FVTPL financial liabilities (derivative
instruments)

—

392

—

392

Total

—

392

—

392

As at 31 March 2011

Level 1

Level 2

Level 3

Total

2,332

243

1,016

3,591

(Millions of Yen)

Available-for-sale financial assets

2,332

243

1,016

3,591

FVTPL financial liabilities (derivative
instruments)

—

763

—

763

Total

—

763

—

763

As at 31 March 2011

Level 1

Level 2

Level 3

Total

28,046

2,921

12,22343,19028,046

2,921

12,22343,190FVTPL financial liabilities (derivative
instruments)

—

9,179

—

9,179

Total

—

9,179

—

9,179

Total

(Thousands of U.S.Dollars (Note 2))

Available-for-sale financial assets
Total

Note:
No transfers occurred between Levels 1, 2 and 3 during the years ended 31 March 2010 and 2011, respectively.

Reconciliation of financial assets categorised at Level 3 from opening balance to closing balance.
(Millions of Yen)

Fair value measurement as at the end of the reporting period
Available-for-sale financial assets

Total

Opening balance

For the year ended 31 March 2010

1,001

1,001

Total gains or losses:

(148)

(148)

- in profit or loss (i)

(127)

(127)

- in other comprehensive income (ii)

(21)

(21)

Sales

(176)

(176)

Others(23)(23)

Closing balance

654

654
(Millions of Yen)

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report79Fair value measurement as at the end of the reporting period
Available-for-sale financial assets

Total

Opening balance

For the year ended 31 March 2011

654

654

Total gains or losses:

(91)

(91)

- in profit or loss (i)

(93)

(93)

- in other comprehensive income (ii)
Purchase
OthersClosing balance

2

2

488

488

(35)

(35)

1,016

1,016
(Thousands of U.S.Dollars (Note 2))

Fair value measurement as at the end of the reporting period
Available-for-sale financial assets

Total

Opening balance

For the year ended 31 March 2011

7,865

7,865

Total gains or losses:(1,099)(1,099)- in profit or loss (i)(1,117)(1,117)- in other comprehensive income (ii)1818

Purchase

5,865

5,865

Others

(408)

(408)

12,223

12,223

Closing balance

Note:(i) Of the total gains or losses for the years ended 31 March 2010 and 2011 included in profit or loss, 127 million yen and 93 million
yen (1,117 thousand U.S.dollars), respectively, relates to available-for-sale financial assets at the end of the reporting period. Related
profit or loss of these assets is included in the line item of ‘Finance costs’ in the consolidated statement of comprehensive income.
Refer to Note 27 “Finance income and costs”.
(ii) Of the total gains or losses for the years ended 31 March 2010 and 2011 included in other comprehensive income, 21 million yen and2 million yen (18 thousand U.S.dollars), respectively, relates to the shares not traded in the market. Related profit or loss is includedin the line item of ‘Net gain/ (loss) on revaluation of available-for-sale financial assets’ in Note 29 “Other comprehensive income”.

80

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report24. Assets held for sale
Details for carrying amounts of assets held for sales are as follows;(Millions of Yen)

As at 31 March 2010
Buildings and structures

Total

Life Care (i)

325

325

Total

325

325

Note:
(i) During the year ended 31 March 2011 the Group approved the sale of the manufacturing plant located at Mulheim in Germany thatwas closed in the previous year. The sale was completed during the year ended 31 March 2011. These assets with a carrying valueof 382 million yen were reclassified to assets held for sale and impairment losses were recognised in the amount of 57 million yen
in the year ended 31 March 2010.
(ii) Subsequent to the year ended 31 March 2011, the Group approved the sale of the vacant Itsukaichi 1st plant in Japan, and the sale
was completed prior to the approval of the consolidated financial statements for the year ended 31 March 2011. Impairment lossesof 58 million yen (699 thousand U.S.dollars) arising from the sale of these assets have been recognised in the profit or loss for theyear ended 31 March 2011.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report8125. Share-based payments(1) Detail of share-based payments
The Group has a stock option plan. The purpose of the plan is to increase the value of the Groupand to improve the financial result of the Group by motivating the members such as directors, officers
employees of the Group, and as well as to retain valuable employees.
After overall approval at the shareholders meeting, options are granted to individuals that are proposed
and approved at the Group’s Board of Directors’ meeting. The options are granted at no cost. The
exercise period of the options is the period determined in the options contract and options not
exercised within this exercise period will expire. Subsequent to the grant date, if a member terminates
his or her employment prior to the vesting date, the options will expire. The option contract includes aclause that limits the maximum number of stock options a member can exercise each year during theexercise periods.
Stock options granted to members are accounted for as share-based payments transactions. Expenses
recorded to other comprehensive income from undertaking shared-based payments transactions were
429 million yen and 544 million yen (6,542 thousand U.S.dollars) for the years ended 31 March 2010 and2011, respectively.
Details of the stock options that are outstanding for the years ended 31 March 2010 and 2011 are as follows;No.

Number of shares

Grant date

Expiry date

Exercise price(Yen)

Fair value at grant
date (Yen)4

158,900

13 Dec 2004

30 Sep 2009

2,713

705

5

445,000

1 Jan 2006

30 Sep 2015

4,150

2,917

6

585,600

7 Nov 2006

30 Sep 2016

4,750

3,961

7

77,60014 Nov 2007

30 Sep 2017

4,230

3,357

8

1,036,000

28 Nov 2008

30 Sep 2018

1,556

952

9

60,00024 Feb 2009

30 Sep 2018

1,704

1,521

10

1,247,600

8 Dec 2009

30 Sep 2019

2,215

2,784

11

1,225,600

7 Dec 2010

30 Sep 2020

1,947

1,861

Note:
The fair value of the stock options at grant date does not include the fair value of stock options to which IFRS 2 “Share-based Payments”
does not apply, as mentioned in (4) below.

(2) Determination of stock option value
Weighted average fair value of the stock option granted during the years ended 31 March 2010 and 2011
was 2,784 yen and 1,861 yen, respectively.
In determining the expense of the stock options, the options were priced using the Black- Scholesmodel. The following table details the assumptions used in the Black-Scholes model for the options
granted in the years ended 31 March 2010 and 2011;
Expected volatility was determined based on recent historical daily share price volatility from the grant
date to forecasted remaining period.
No.10

2,425

Exercise price (Yen)

2,215

1,947

Expected volatility

36.67%

36.56%

Expected remaining option life (years)

82

No.11

Share price at grant date (Yen)

1,945

6.1

6.1

Dividends yield

2.68%

3.34%

Risk free rate

0.67%

0.57%

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(3) The number and weighted average exercise prices of stock options
Weighted average exercise price of the outstanding options was 2,701 and 2,503 yen as at the years
ended 31 March 2010 and 2011, respectively. Weighted average remaining contractual life was 8.2 years
and 7.8 years as at 31 March 2010 and 2011, respectively.
For the year ended 31 March 2010

For the year ended 31 March 2011

Number ofshares

Weighted average
exercise price(Yen)

Number ofshares

Weighted average
exercise price(Yen)

Outstanding at the beginning of theperiod2,363,100

3,005

3,229,000

2,701

Granted

1,247,600

2,215

1,225,600

1,947

Forfeited (i)(153,200)

3,924(174,400)

2,379

Exercised(69,600)

1,587(17,200)

1,556

Expired(158,900)

2,713

—

—

Outstanding at the end of the period

3,229,000

2,701

4,263,000

2,502

Exercisable at the end of the period

965,800

3,840

1,657,400

3,322

Note:
(i) Stock options forfeited were due to employee retirements.

Stock options exercised during the year ended 31 March 2010 were as follows;
Number of shares exercised

Exercise date

Share price at exercise date
(Yen)

8

2,000

13 Oct 2009

2,080

8

2,000

10 Dec 2009

2,375

8

3,200

12 Jan 2010

2,579

9

14,80012 Jan 2010

2,579

8

36,00010 Feb 2010

2,258

8

11,60010 Mar 2010

2,322

Total

69,600Stock options exercised during the year ended 31 March 2011 were as follows;
Number of shares exercised

Exercise date

Share price at exercise date
(Yen)

8

800

12 Apr 2010

2,525

8

2,000

10 May 2010

2,444

8

2,800

14 May 2010

2,373

8

1,200

10 Jun 2010

2,076

8

800

10 Nov 2010

1,958

8

2,000

10 Dec 2010

1,980

8

2,400

10 Feb 2011

1,985

8

5,200

10 Mar 2011

1,937

Total

17,200HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report83(4) Stock options to which IFRS 2 is not applied
The following are details of the stock options granted after 7 November 2002 and vested before 1 April
2008, the date of transition to IFRSs, resulting in IFRS 2 not being applied;No

NumberGrant date

Expiry date

Exercise price(Yen)

Fair value at grant
date (Yen)4

476,700

13 Dec 2004

30 Sep 2009

2,713

1,729

5

445,000

1 Jan 2006

30 Sep 2015

4,150

2,518

6

195,200

7 Nov 2006

30 Sep 2016

4,750

1,113

Weighted average exercise price of the outstanding options was 4,340 yen and 4,336yen as at 31 March2010 and 2011, respectively. Weighted average remaining contractual life was 5.8 years and 4.8 years as
at 31 March 2010 and 2011, respectively.
For the year ended 31 March 2010

For the year ended 31 March 2011

Number ofshares

Weighted average
exercise price(Yen)

Number ofshares

Weighted average
exercise price(Yen)

Outstanding at the beginning of theperiod984,100

3,766

553,400

4,340

Forfeited (i)(86,000)

4,290(8,000)

4,600

—

—

—

—

Expired(344,700)

2,713

—

—

Outstanding at the end of the period

553,400

4,340

545,400

4,336

Exercisable at the end of the period

553,400

4,340

545,400

4,336

Exercised

Note:(i) Stock options forfeited were due to employee retirements.

There were no stock options exercised during the years ended 31 March 2010 and 2011.

84

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report26. Revenue and expenses (excluding finance income andcosts)(1) Sales from continuing operations
The following is an analysis of the Group’s sales from continuing operations;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended 31 For the year ended 31 For the year ended 31
March 2010
March 2011
March 2011

Sales of goods and products
Service revenue
Total sales

412,307401,272

4,958,590

1,158

1,042

12,537

402,430

413,349

4,971,127(2) Other income from continuing operations
The following is an analysis of the Group’s other income from continuing operations;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended 31 For the year ended 31 For the year ended 31
March 2010
March 2011
March 2011

1,439

611

7,351

Rent

90

107

1,290

Government grants

619

161

1,937

Gain on sale of plant, property andequipment

410

211

2,539

2,783

2,651

31,870

5,341

3,741

44,987

Commission

OthersTotal other income(3) Research and development expenses recognised as incurred(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended 31 For the year ended 31 For the year ended 31
March
March
March
2011
2011
2010

Employee benefits expenses

6,410

7,299

87,780Commission expenses

1,485

1,753

21,086

Depreciation and amortisation

1,719

1,684

20,248Other expenses

5,056

5,646

67,902

Total research and development expenses
recognised as incurred

14,67016,382

197,016Note:
The above items are included in the corresponding line items in the consolidated statement of comprehensive income.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report85

(4) Employee benefits expense
The following is an analysis of the Group’s employee benefits expense from continuing operations;(Millions of Yen)

Salary, bonus and others(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March
2010

For the year ended
31 March
2011

For the year ended
31 March
2011

81,93884,722

1,018,910

Retirement benefit (Note 19)
Defined benefit (Note 19)

1,620

1,293

15,549Defined contribution (Note19)

1,448

1,485

17,855Retirement benefit total

3,068

2,778

33,404

429

544

6,542

Share-based payments (Stock option)(Note 25)
Severance payments (Note 19)

1,931

2,172

26,120

Others

3,909

3,781

45,47591,27593,9971,130,451

Total employee benefits expense(5) Other expenses
The following is an analysis of the Group’s other expenses from continuing operations;(Millions of Yen)

For the year ended
31 March 2010

Packaging/shipping/transportation

8,501(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2011

For the year ended
31 March 2011

7,927

95,340Travel

4,669

5,193

62,453

Rent

4,654

5,187

62,381

Utilities

8,121

8,726

104,943

Repair and maintenance

7,692

8,150

98,017

Foreign exchange loss (i)

5,773

5,892

70,865

Loss on sales of property, plant andequipment

722

81

970

Loss on disposals of property, plant andequipment

881

514

6,182

Loss on disposals of intangible assets

2,050

25

299

Others48,93850,131

602,900

92,001

91,826

1,104,350

Total other expenses

Note:(i) Foreign exchange loss above included gains or losses resulting from fluctuations in currency derivatives of 57 million yen and 392
million yen (4,699 thousand U.S.dollars) of losses for the years ended 31 March 2010 and 2011, respectively.

(6) Loss on disaster
The Group recognised a loss on disaster due to the Great East Japan Earthquake on 11 March 2011 in
the amount of 774 million yen (9,308 thousand U.S.dollars) for the year ended 31 March 2011. The loss
comprises the aggregate loss on physical damage of property, plants and equipment, loss on physicaldamage of inventories, losses due to suspension of operations, and donations.
The loss on disaster is included in the line item ‘Depreciation and amortisation’ and ‘Other expenses’ inthe consolidated statement of comprehensive income.

86

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report27. Finance income and costs(Millions of Yen)

For the year ended
31 March 2010

(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2011

For the year ended
31 March 2011

Finance income
Interest income
Cash and cash equivalents, loans andreceivables
Available-for-sale financial assets

823

861

10,361

1

—

—

55

56

668

32

—

—

Dividend income
Available-for-sale financial assets
Gain on sales
Investments in associates
Available-for-sale financial assets

1

1

9

Total finance income

912

918

11,038

2,169

1,907

22,937

Other provisions

43

18

221

Other liabilities

120

65

779

0

—

—

587

614

7,376

(23)

(19)

(228)

2,896

2,585

31,085

Finance costs
Interest costs
Interest-bearing debt

Loss on sales
Available-for-sales financial assets
Impairment losses
Available-for-sales financial assets (ii)
Fair value gains /losses on derivatives
Interest rate swaps
Total finance costs

Note:(i) Loss resulting from the fair value measurement of currency derivatives is disclosed in the line item ‘Foreign exchange loss’ of Note
26 “Revenue and expenses (excluding finance income and costs), (5) Other expenses.”(ii) Impairment losses were recognised on listed shares and the shares of private companies categorised as available-for-sale financial
assets due to significant or prolonged decline in the fair values against acquisition cost.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report8728. Discontinued operations
The Group classifies continuing and discontinued operations by SBU. Accordingly, when the Group disposesof a business that comprises a part of a SBU, the business remains classified as continuing operations.
In the current fiscal year, the Group transferred its Media business that manufactures glass media for harddisks, and related assets to Western Digital Corporation, a manufacturing company of hard disk drives.
1. Reporting Segment
Information Technology
2. The following is an analysis of revenue, expenses, profit/loss and cash flows of
discontinued operations;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

Note

For the year
ended 31 March2010

For the year
ended 31 March2011

For the year
ended 31 March
2011

(i)

16,478

11,214

134,8648

561Profit/loss for the year from discontinued
operations
Revenue:
Sales
Finance income

378

10,586

127,312

Total revenue

16,86421,805262,237

Change in merchandises, products, workin-process

262

(214)

(2,573)

8,914

2,882

34,663

Other income(ii)

Expense:Raw materials and consumables used(i)

Employee benefits expense

1,647

729

8,765

Depreciation and amortisation

2,782

925

11,127227

928

11,156

1,989

6,393

76,887

15,821

11,643140,025

1,043

10,162

122,212

Income tax

83

288

3,469

Net gain from discontinued operations(attributable to the shareholders of theCompany)

960

9,874

118,743

Commission expense
Other expenses
Total expense
Net gain from discontinued operations
before tax

Note:(i) ‘Sales’ and ‘Raw materials and consumables used’ above includes the following transactions;(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2010

For the year ended
31 March 2011

For the year ended
31 March 2011

5,182

1,500

18,046

Purchase from continuing operations(ii) ‘Other income’ includes the gain on business transfer to Western Digital Corporation on 30 June 2010, and amounted to 10,343
million yen (124,386 thousand U.S.dollars).

88

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended 31 March2011

For the year ended 31 March
2011

20,654

248,390

Non-current assets(7,632)(91,785)

Current assets(3,424)(41,184)

Consideration received
Assets and liabilities transferred

745

8,965

10,343

124,386

Current liabilities
Net capital gain

3.The following is a cash flow analysis for discontinued operations;(Millions of Yen)

For the year ended
31 March 2010

(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2011

For the year ended
31 March 2011

Cash flows from discontinued operations
Cash flows from operating activities

1,822

1,501

18,057

Cash flows from investing activities (i)(1,684)

19,784

237,931

Cash flows from financing activities (ii)(2,261)(20,700)(248,948)(2,123)

585

7,040

Total

Note:
(i) Cash flows from investing activities include the proceed from business transfer of 20,654 million yen (248,390 thousand U.S.dollars).
(ii) Cash flows from financing activities for the years ended 31 March 2010 and 2011 represent dividend payment to continuing operations.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report8929. Other comprehensive income
For the years ended 31 March 2010 and 2011, other comprehensive income comprises the following;(Millions of Yen)

For the year ended
31 March 2010

(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2011

For the year ended
31 March 2011

Other comprehensive income:(1) Net gain/(loss) on revaluation of availablefor-sale financial assets
Gains (losses) arising during the year

406

(207)

(2,496)

Reclassification adjustments to profit or loss forthe year

89

613

7,376

Total

495

406

4,880

5,783

(14,081)(169,342)

Reclassification adjustments to profit or loss forthe year

83

(107)

(1,293)

Total

5,866

(14,188)(170,635)(3) Share of other comprehensive income ofassociates

(281)

241

2,899

Other comprehensive income/(loss) before tax

6,080(13,541)(162,856)

Income tax relating to components of othercomprehensive income

(64)

511

6,152

Total other comprehensive income/(loss)(net of tax)

6,016

(13,030)(156,704)(2) Exchange differences on translation offoreign operations
Gains (losses) arising during the year

‘Net gain/(loss) on revaluation of available-for-sale financial assets’ represents unrealised gain or loss onavailable-for-sale financial assets at the end of the reporting period.
‘Exchange differences on translation of foreign operations’ consist of differences on foreign currency
conversion for financial statements of foreign operations.
Taxation on each item of other comprehensive income for the years ended 31 March 2010 and 2011 is
as follows;

90

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(Millions of Yen)

For the year ended 31 March
2010
Total

Tax

(Thousands of U.S.Dollars (Note 2))

For the year ended 31 March2011

Net of
tax

Total

Tax

For the year ended 31 March2011

Net of
tax

Total

Tax

213

4,880

(2,316)

Net oftax

Othercomprehensive
income attributableto owners of theCompany(1) Net gain/(loss)
on revaluationof available-forsale financial
assets

495

(44)

451

406

(193)

(2) E
 xchange
differenceson translationof foreign
operations

5,853

(20)

5,833

(14,145)704(3) S hare of othercomprehensive
income ofassociates

(281)

—

(281)

241

—

Sub total

6,067

(64)

6,003

(13,498)511(1) Exchange
differenceson translationof foreign
operations

13

—

13

(43)

—

(43)

(514)

—

(514)

Sub total

13

—

13

(43)

—

(43)

(514)

—

(514)

Total othercomprehensive
income

6,080

(64)

6,016

(13,541)511(13,441) (170,121)

241

2,899

(12,987) (162,342)

2,564

8,468 (161,653)

—

2,899

6,152 (156,190)

Other
comprehensive
income attributableto Non-controllinginterests(13,030) (162,856)

6,152 (156,704)

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report9130. Earnings per share(1) Basic earnings per share and diluted earnings per share(Yen)

For the year ended
31 March 2010

(U.S.Dollars (Note 2))

For the year ended
31 March 2011

For the year ended
31 March 2011

Basic earnings per share
From continuing operations

93.02

115.60

1.39

From discontinued operations

2.22

22.89

0.28

95.24

138.49

1.67

92.93

115.54

1.39

Total basic earnings per share
Diluted earnings per share
From continuing operations
From discontinued operations
Total diluted earnings per share

2.22

22.87

0.27

95.15

138.41

1.66(2) The basis of calculation of basic earnings per share and diluted earnings per share
1. Basic earnings per share(a) Profit for the year attributable to owners of the Company(Millions of Yen)

(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2010

For the year ended
31 March 2011

For the year ended
31 March 2011

Profit attributable to owners of the Company
from continuing operations

40,25349,870599,769

Profit attributable to owners of the Company
from discontinued operations

960

9,874

118,743

Profit used in the calculation of basic earnings
per share

41,21359,744

718,512(b) Weighted average number of ordinary shares used in the calculation of basic earnings per share(Shares in thousands)

For the year ended 31 March2010

Weighted-average number of ordinary shares

For the year ended 31 March
2011

431,406

432,755

2. Diluted earnings per share(a) Profit for the year attributable to owners of the Company(Millions of Yen)

For the year ended
31 March 2011

For the year ended
31 March 2011

Profit attributable to owners of the Company
from continuing operation after dilution

40,25349,870599,769

Profit attributable to owners of the Company
from discontinued operation after dilution

960

9,874

118,743

41,21359,744

718,512

Profit used in the calculation of diluted earnings
per share

92(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2010HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report(b) Weighted average number of ordinary shares used in the calculation of diluted earnings
per share(Shares in thousands)

Weighted average number of ordinary shares

For the year ended 31
March 2010

For the year ended 31
March 2011

432,755

431,406

400

236

433,155

431,642

Shares deemed to be issued for no consideration in
respect of:
Stock options
Weighted average number of ordinary shares used in
the calculation of diluted earnings per share

31. Non‑cash transactions
Non-cash transactions for the years ended 31 March 2010 and 2011 consisted of acquiring property,
plant and equipment through new finance lease arrangements in the amount of 3 million yen and 18
million yen (216 thousand U.S.dollars), respectively.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report9332. Main subsidiaries
Details of the Company’s main subsidiaries are as follows;

Reportable
Segment

Major products/
services in
the reportablesegment

Location

HOYA MAGNETICSSINGAPORE PTE, LTD.

Information
Technology

Electronics
related products

HOYA GLASS DISK(THAILAND) LTD.

Information
Technology

HOYA GLASS DISKPHILIPPINES, INC.

Name of Subsidiaries

94

Proportion of shares held
As at 31
March 2010

As at 31
March 2011

SINGAPORE

100.0%

100.0%

Electronics
related products

THAILAND

100.0%

100.0%

Information
Technology

Electronics
related products

PHILIPPINES

100.0%

100.0%HOYA GLASS DISK VIETNAM Information
LTD.
Technology

Electronics
related products

VIETNAM

100.0%

100.0%HOYA GLASS DISK VIETNAM Information
Technology
Ⅱ LTD.

Electronics
related products

VIETNAM—

100.0% (i)HOYA OPTICS (TAIWAN)
LTD.

Information
Technology

Electronics
related products

TAIWAN

100.0%

100.0%HOYA ELECTRONICS KOREA Information
CO., LTD.
Technology

Electronics
related products

SOUTH KOREA

100.0%

100.0%HOYA ELECTRONICS
MALAYSIA SDN.BHD.

Information
Technology

Electronics
related products

MALAYSIA

100.0%

100.0%HOYA CORPORATION USA

Information
Technology

Electronics
related products

U.S.A.

100.0%

100.0%

EAST CHEER INVESTMENT
LIMITED

Information
Technology

Electronics
related products

CHINA

100.0%

100.0%SHENZHEN KTM GLASSSUBSTRATE CO., LTD.

Information
Technology

Electronics
related products

CHINA

51.0%

51.0%

HOYA OPTICS (THAILAND)
LTD.

Information
Technology

Imaging related
products

THAILAND

100.0%

100.0%HOYA OPTO-ELECTRONICS
QINGDAO LTD.

Information
Technology

Imaging related
products

CHINA

100.0%

100.0%HOYA OPTICALTECHNOLOGY (SUZHOU)LTD.

Information
Technology

Imaging related
products

CHINA

100.0%

100.0%PENTAX CEBU PHILIPPINESCORPORATION

Information
Technology

Imaging related
products

PHILIPPINES

100.0%

100.0%PENTAX VN CO., LTD.

Information
Technology

Imaging related
products

VIETNAM

100.0%

100.0%HOYA PHOTONICS, INC.

Information
Technology

Imaging related
products

U.S.A.

99.9%

100.0% (ii)

HOYA LENSMANUFACTURING MALAYSIA Life Care
SDN.BHD.

Health Carerelated products

MALAYSIA

100.0%

100.0%HOYA LENS THAILAND LTD. Life Care

Health Carerelated products

THAILAND

100.0%

100.0%HOYA LENS GUANGZHOULTD.

Life Care

Health Carerelated products

CHINA

95.0%

95.0%

HOYA LENS AUSTRALIA PTY. Life Care
LTD.

Health Carerelated products

AUSTRALIA

100.0%

100.0%HOYA LENS INDIA PRIVATELIMITEDLife Care

Health Carerelated products

INDIA

100.0%

100.0%HOYA LENS VIETNAM LTD.

Life Care

Health Carerelated products

VIETNAM

100.0%

100.0%HOYA LENS DEUTSCHLAND
GMBHLife Care

Health Carerelated products

GERMANY

100.0%

100.0%HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s ReportName of Subsidiaries

Reportable
Segment

Major products/
services in
the reportablesegment

Proportion of shares held
Location

As at 31
March 2010

As at 31
March 2011HOYA LENS U.K. LTD.

Life Care

Health Carerelated products

UNITED
KINGDOM

100.0%

100.0%HOYA LENS ITALIA S.P.A.

Life Care

Health Carerelated products

ITALY

100.0%

100.0%HOYA LENS IBERIA S.A.

Life Care

Health Carerelated products

SPAIN

100.0%

100.0%HOYA LENS FRANCE S.A.S.

Life Care

Health Carerelated products

FRANCE

100.0%

100.0%HOYA LENS OF AMERICA,
INC.

Life Care

Health Carerelated products

U.S.A.

100.0%

100.0%VISION MEMBRANETECHNOLOGIES, INC.

Life Care

Health Carerelated products

U.S.A

82.7%

— (iii)HOYA HOLDINGS N.V.

Health Care
Life Care and related products
Corporateand EU
headquarters

NETHERLANDS

100.0%

100.0%PENTAX OF AMERICA, INC.

Information
Technology
and Life Care

Imaging related
products andMedical related
products

U.S.A.

100.0%

100.0%PENTAX CANADA, INC.

Information
Technology
and Life Care

Imaging related
products andMedical related
products

CANADA

100.0%

100.0%PENTAX EUROPE GMBH

Life Care

Medical related
products

GERMANY

100.0%

100.0%PENTAX ITALIA S.R.L

Life Care

Medical related
products

ITALY

60.0%

60.0%

PENTAX U.K. LTD.

Life Care

Medical related
products

UNITED
KINGDOM

100.0%

100.0%MICROLINE SURGICAL, INC.

Life Care

Medical related
products

U.S.A.

100.0%

100.0%HOYA HOLDINGS ASIA
PACIFIC PTE. LTD.

Corporate

Asia headquarters SINGAPORE

100.0%

100.0%HOYA HOLDINGS(ASIA) B.V. Corporate

Holding company NETHERLANDS

100.0%

100.0%HOYA HOLDINGS, INC.

U.S. headquarters U.S.A.

100.0%

100.0%

CorporateNote:(i) HOYA GLASS DISK VIETNAM Ⅱ LTD. was incorporated on 28 May 2010.
(ii) Additional shares of HOYA PHOTONICS, INC. were acquired.
(iii) VISION MEMBRANE TECHNOLOGIES, INC. was liquidated on 23 March 2011.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report9533. Related party disclosure
Transactions between the Company and its subsidiaries which are related parties of the Company,
have been eliminated in consolidation and are not disclosed in this note. Details of the balances andtransactions between the Company and other related parties are disclosed as follows;(1) Transactions with related parties, and receivables and payables balances
The Group had the transactions with related parties as follows;
As at/ for the year ended 31 March 2010
(Millions of Yen)

Related party

Description of the related
party transaction

Associate

AVAN STRATE INC.

Purchase of raw materials

Associate

AVAN STRATE INC.

License fee received

Type of related party

Transaction
amountOutstandingbalance (i)

383

372

1,266

1,151

Transaction
amountOutstandingbalance (ii)

As at/ for the year ended 31 March 2011
(Millions of Yen)

Related party

Description of the related
party transaction

Associate

AVAN STRATE INC.

Purchase of raw materials

27—

Associate

AVAN STRATE INC.

License fee received

98

23

Associate

AVAN STRATE INC.

Advance payment forpurchase of raw materials

3,000

3,000

Related party

Description of the related
party transaction

Transaction
amountAssociate

AVAN STRATE INC.

Purchase of raw materials

322—

Associate

AVAN STRATE INC.

License fee received

1,180

273

Associate

AVAN STRATE INC.

Advance payment forpurchase of raw materials

36,07936,079Type of related party

As at/ for the year ended 31 March 2011
(Thousands of U.S.Dollars (Note 2))

Type of related party

Outstandingbalance (ii)Note(i) Transactions with associates are at arm’s length basis.
(ii) Amounts of ‘Outstanding balance’ above are unsecured and no guarantees have been received. An allowance for doubtful accounts
has not been provided.

(2) Remuneration of key management personnel
The remuneration of directors and other members of key management personnel during the year isdisclosed as follows;(Millions of Yen)

For the year ended
31 March 2010

(Thousands of U.S.Dollars (Note 2))

For the year ended
31 March 2011

For the year ended
31 March 2011

Short-term benefits

459

373

4,494

Share-based payments

78

85

1,018

537

458

5,512

Total remuneration of key management
personnel

The remuneration of directors and key management personnel is determined by the remunerationcommittee based on the performance of individuals and market trends.

96

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report34. Business combinations
The Group did not acquire any company through business combination during the year ended 31
March 2011.
The details of business combination during the year ended 31 March 2010 were as follows;(1) Subsidiary acquired
The Group acquired 100% of the outstanding shares of Starion Instruments Corporation (“Starion”) on
17 April 2009. Starion manufactures medical devices. Starion was acquired in light of the robust growthin the medical device market due to the growing demand for advanced medical care.

(2) Consideration transferred(Millions of Yen)

AmountCash and cash equivalents

3,431

Liabilities accepted on acquisition and others

285

Contingent liability

1,201
Total

4,917

Note:
(i) Contingent liability requires the Group to make additional payments if certain conditions (accumulated sales or achievement ofresearch and development) are met in a specified period.
(ii) Costs directly related to the acquisition were 108 million yen which is included in the consideration amount above.

(3) Assets acquired at the date of acquisition(Millions of Yen)

AmountNon-current assets:
Property, plant and equipment

21

Intangible assets

813

Deferred tax assets (Note 10)

777

Current assets:
Cash and cash equivalents

8

Trade and other receivables

123

Inventories

164
Total

1,906

(4) Goodwill arising on the acquisition(Millions of Yen)

AmountAcquisition cost
Plus: non-controlling interests

4,917
—

Less: fair value of identifiable net assets acquired(1,906)

Goodwill arising on the acquisition

3,011

Goodwill relates to the benefit of expected synergies, revenue growth and future market development.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report97(5) Net cash outflow on the acquisition(Millions of Yen)

For the year ended
31 March 2010

Consideration paid in cash and cash equivalents
Less: cash and cash equivalents balances possessed by acquiree
Cash paid for acquisition (excluding acquiree’s cash)

3,431
(8)
3,423

(6) Impact of the acquisitions on the results of the Group
There is no significant impact on the financial results of the Group, as the acquired company is mainly
engaged in research and development activities. Accordingly, the Group omits the disclosure (proforma) of revenue, and profit or loss information which would assume the business combination
occurred on 1 April 2009, and the disclosure of profit or loss information arising after acquisition dateincluded in the consolidated statement of comprehensive income.

98

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report35. Sale of subsidiary
No subsidiary was sold in the years ended 31 March 2010 and 2011.

36. Contingent liabilities
Guarantee liabilities
The Group provides guarantees on borrowings of business partners and the Group’s employees fromfinancial institutions as follows;(Millions of Yen)

As at 31 March2010

Business partners

As at 31 March
2011

1,404

16,893

1,631
1

1

8

1,632

1,405

16,901The Group’s employees
Total(Thousands of U.S.Dollars (Note 2))

As at 31 March
2011

37. Commitments for expenditure
Payment commitments after the reporting date are as follows;(Millions of Yen)

As at 31 March
2010

Commitments for the acquisition of property,
plant and equipment

4,147(Thousands of U.S.Dollars (Note 2))

As at 31 March2011

As at 31 March
2011

3,471

41,742

38. Subsequent events
Resolution on cash dividends
On 31 May 2011, a resolution was made by the Company’s Board of Directors for the payment of acash dividend to shareholders of record on 31 March 2011 of 15,099 million yen (181,593 thousand
U.S.dollars) (35 yen per common share).

39. Approval of financial statements
The consolidated financial statements for the year ended 31 March 2011 were approved by theCompany’s Board of Directors and authorised for issue on 21 June 2011.

HOYA Corporation Consolidated Financial Statements under IFRSs and Independent Auditor’s Report99