09

Annual R ep ort

For the Year Ended March 31, 2009

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Since its establishment in 1941, HOYA has continued to grow around the core businessof leading optical technologies. In today’s changing global economy, Hoya is using its
unique strengths in technology and management to respond quickly to changes in thebusiness climate and achieve sustained growth.

Portfolio Management for Stable Growth
The Hoya Group maintains many different businesses. Achieving balance within
this portfolio to ensure the Group’s profitability, stability, and growth lie at thecore of the Group’s management. Hoya allocates investments according tochanges in the times, working to both maximize corporate value and ensuresustained growth.

In
f

x
ta

m
or

Health Care

ElectroOptics

36.1%

Vision Care

11.0%

24.4%

Ey

eC

n Technology

Pentax

26.9%

o
ati

Pe
n

Sales by business area

Photonics

1.4%

are

Contents

1

Our Unique Strengths

24 Corporate Governance2

Consolidated Financial Highlights

3

Our Enduring Vision

28	Environmental Protection andOccupational Safety and Health Initiatives

7

Our Evolving Strategy

A Message to Our Stakeholders
Interview with COO

10 Hoya at a Glance
12 Information Technology			 12 Electro-Optics Division			 16 Photonics Division

17 Eye Care			 17 Vision Care Division			 19 Health Care Division

21 Pentax

32 R&D and Intellectual Property Activities
37 Financial and Corporate Data
Disclaimer Regarding Forward-Looking Statements
Statements made in this annual report with respect to Hoya’s plans and future performance are forward-looking statements based on management’s judgments, plans andforecasts in light of the information available at the time of publication. Hoya cautions thata number of factors could cause actual events and results to differ materially from those
discussed in the forward-looking statements. Such factors include but are not limited toforeign exchange rates, market trends and economic conditions.
Notation of Fiscal Years in This Reportl Hoya’s fiscal year ends on March 31. In this annual report, references to years are theperiod ended March 31 of the year indicated.
l In this annual report, “the previous fiscal year,” “the fiscal year under review,” and“the year ahead” indicate the years ended March 31, 2008, March 31, 2009, and theyear ending March 31, 2010, respectively.

A Flexible Global Strategy
Hoya does business all around the world. In order to deliver Hoya products to
our global customers quickly and efficiently, Hoya is accelerating the shift of its
production and sales bases overseas, keeping in mind optimal local production
and optimal local sales and promoting its worldwide business. At each location,
we seek both to localize Hoya and to promote global human resources.

Sales by region

Japan

EuropeAsia and other

37.5%

22.0%

28.2%

North America

12.3%
1997	Hoya completes the three-pronged matrix structure with
regional headquarters in North America, Europe, and Asia
2003

The Group’s financial headquarters move to Europe

2004

Eyeglass lens operation headquarters move to Europe

2007

IOL operations headquarters move to North America

A Highly Transparent
Corporate Governance System
In order to keep guard against the potential for stagnation in the Board of Directors system, Hoya has gradually reduced the number of directors, and in 1995
began appointing outside directors. The current Board of Directors comprises
five outside directors and three internal directors, for a total of eight. With morethan half of the Board coming from outside the Company, management supervision is enhanced and transparency is ensured.
Hoya is governed under the “company with committees” system as definedby the Companies Act of Japan. All members of the Nomination Committee,
Compensation Committee and Audit Committee are outside directors, helping
to enhance the soundness of Hoya’s management.

Changes in number of directors

1989

1995

2009

Internal directors: 17

Internal directors: 7
Outside director: 1

Internal directors: 3
Outside directors: 5
HOYA Annual Report 20091

Consolidated Financial Highlights
Years Ended March 31

2005

2006

2007

2008Note 2

2009

Net sales (Millions of yen)

308,172

344,228

390,093481,631454,195

Operating income (Millions of yen)

84,920101,096

107,213

95,07459,095

Ordinary income (Millions of yen)

89,525

103,638

102,909

100,175

71,081

Net income (Millions of yen)

64,13575,62083,391

81,725

25,110Capital expenditures (Millions of yen)

40,17548,78654,432

39,46534,839Research and development expenses (Billions of yen)

10,957

14,135

14,92017,413

17,630Total assets (Millions of yen)

351,482

361,538

447,644689,444591,096

Total equity (Millions of yen)

277,889

279,481

367,145394,626

338,010144.71

171.71

193.50189.01

58.01

Diluted net income (Yen)

144.38171.08

192.78188.7858.00

Owners’ equity (Yen)

623.59648.87845.98903.49774.65

37.50

60.00

65.00

65.00

65.00

Price earnings ratio (PER) (Times)

20.4

27.7

20.2

12.4

33.3

Price cash flow ratio (PCFR) (Times)

17.2

19.7

17.1

8.4

9.2

Price book value ratio (PBR) (Times)

4.7

7.3

4.6

2.6

2.5

2,950

4,750

3,910

2,340

1,930

For the year:

At year-end:

Per share data:
Net income (Yen)(Note 1)

Cash dividends applicable to the year (Yen)
Performance Indicators:

Stock price at year-end (Yen)Note1) On December 9, 2005, the Accounting Standards Board of Japan (ASBJ) published a new accounting standard for presentation of equity, which is effective from the fiscal
year ended March 31, 2007. Under this accounting standard, certain items which were previously presented as liabilities or assets are now presented as components ofequity. Such items include stock subscription rights, minority interests and any deferred gain on derivative instruments. The Company now uses “Owners’ equity” to replace
the former “Shareholders’ equity”, which excludes such items as stock subscription rights and minority interests from Total equity.
2) In August 2007, Pentax Corporation and its subsidiaries were added to the Group’s scope of consolidation. Therefore, performance figures shown include the results ofPentax Corporation and its subsidiaries from the second half of the fiscal year ended March 31, 2008 (the six-month period from October 1, 2007 to March 31, 2008).

Earnings per share / Returnon equity / Return on Assets

Operating income /Operating margin

Net sales(Millions of yen)

(Millions of yen)

500,000

160,000

30(%)

120,000

20

80,00010(Yen)

(%)

250

30
20

400,000

300,000

200

10
0

150

200,000

100
40,000100,000

0

0

0

2005

2006

2007

2008

2009

0

2005

2006

2007

n Operating income (left)
Operating margin (right)

2 HOYA Annual Report 2009

50

2008

2009

2005

n EPS (left)
ROE (right)
ROA (right)

2006

2007

2008

2009

A Message to Our Stakeholders

Through future-looking business portfolio management and with our outstanding optical technologies,
Hoya aims to be a s­ ustainable company that continues
to ­provide society with solid value.
Hiroshi Suzuki

n
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ndurinPresident and CEO

Our E

Fiscal 2009, the year ended March 31, 2009, was a tumultuous year marked by a financial crisis in the
U.S. that ended up causing a global recession. For the Hoya Group, however, it was also the beginningof our next stage of evolution. I would like to take this opportunity to report to our stakeholders about
conditions in fiscal 2009 and our outlook going forward.

Review of Fiscal 2009
During fiscal 2009, Hoya’s business environment deteriorated rapidly. Financial unease quickly spread from theUnited States around the globe, resulting in a drop in capital expenditure and stagnant consumer spending andultimately a significant slowdown in the real economy. Demand for digital products in particular contracted
sharply from the third quarter (October to December 2008), while orders dropped as companies cut production.
Downward pressure on prices also intensified.
Under these conditions, the Hoya Group posted consolidated net sales of ¥454,195 million, while operating
income was ¥59,095 million, ordinary income was ¥71,081 million and net income was ¥25,110 million. Despite
the fact that the full-year results of Pentax and its subsidiaries were included in consolidated

Fiscal 2009 was the beginning of the
Hoya Group’s next stage of evolution

results for the first time, sales were down 5.7% year on year due to a major fall in demand in
the Information Technology field and in Pentax’s digital camera business. Operating income
and ordinary income were down 37.8% and 29.0%, respectively, due to factors such as lower

sales in the major business divisions and an operating loss incurred by Pentax. Moreover, in the current uncertain business environment, we carefully evaluated businesses, conservatively recognizing impairment losses on
fixed assets for Pentax business divisions and other. This step resulted in ¥30,459 million in impairment losses
booked as special charges, which contributed to a 69.3% year-on-year decline in net income.

HOYA Annual Report 20093

A Message to Our Stakeholders

Information Technology
Overall net sales in the Electro-Optics business were ¥163,902 million (down 21.9% compared with the preceding
fiscal year), and operating income came to ¥39,712 million (down 41.1% compared with the preceding fiscal year).
Orders for mask blanks used in semiconductor production were substantially down, reflecting the generalslowdown in the semiconductor market. Photomasks, which have a very specialized market, held up relatively
well until the third quarter, but ultimately recorded a decline in sales for the full year.
Photomasks for LCD panels saw lower sales as capital expenditures in the panel market were halted fromthe second quarter of fiscal 2008 due to sluggish demand for LCD televisions.
In glass disks for hard disk drives, sales fell due to the effect of foreign currency movements and falling
prices. In light of the rapid market deterioration and the associated changes in the industry landscape, we
decided to halt negotiations regarding the hard disk media-related business merger with Showa Denko K.K.
that had been scheduled to take place in fiscal 2009.
In optical lenses, production adjustments in the digital camera market resulted in lower orders for lenses forcompact digital cameras, while prices declined, leading to a significant fall in sales.

Eye CareIn the Vision Care business, which produces eyeglass lenses, net sales totaled ¥110,725 million (down 12.4%
compared with the preceding fiscal year) while operating income reached ¥21,807 million (up 5.6% comparedwith the preceding fiscal year). Both in Japan and overseas, we saw stronger competition from low-priced lenses
produced in Asian countries, and even though we performed well in Europe and Asia, the yen’s appreciation
resulted in lower sales. Meanwhile, we worked to improve the efficiency and lower the cost of custom productproduction, which enabled us to achieve higher profits in this business.
In the Health Care business, net sales were ¥49,968 million (up 8.2% compared with the preceding fiscal year)
and operating income reached ¥11,544 million (up 13.6% compared with the preceding fiscal year). In contactlenses, we won more customers by focusing on high-value-added products and conducting sales consultations,while intraocular lenses—and soft IOLs in particular—also performed steadily, helping to boost results.

PentaxPentax posted net sales of ¥122,190 million and an operating loss of ¥11,572 million. Although megapixel imaging capable endoscope systems performed well, overall medical endoscope sales were down due to the effects
of foreign currency movements. In digital cameras, both SLR and compact camera sales dropped as a result ofdrastically lower demand and intensifying price competition.
Although medical-use endoscopes contributed to profits, the slump in the digital camera business, as wellamortization of goodwill following the merger, resulted in an operating loss for the Pentax business in the fiscal
year under review.

Portfolio Management: Generating Solid Value
Into the Future
Our results were considerably worse in fiscal 2009 than fiscal 2008. The major reason was the abrupt drop in
demand in the Information Technology field, the pillar of our earnings, as a result of the global economic slowdown. I think it would be accurate to say that the industry itself has begun the structural transition from a growthindustry to a mature one. In order for Hoya to achieve growth under these conditions, we need to reinvent ourbusiness scheme to respond flexibly to change and build a business structure that can ensure stability and growth.

4 HOYA Annual Report 2009

Since it was founded in 1941 as Japan’s first specialized optical glass manufacturer, Hoya has expanded andgrown from our core competence in optical technology to cover a broad range of businesses, including electronics, photonics, and eye care. This history is one of “portfolio management;” developing core businesses
while cultivating new ones, acquiring outside businesses and selectively allocating resources to ensure balanced
growth and earnings for the Group overall. Over the years, Hoya has achieved continuous growth by optimallystructuring its business portfolio to stay in step with the times. Our merger with Pentax in fiscal 2008 was basedon this idea. When we looked ahead to Hoya 10 or 20 years down the road, we wanted to ensure that the Company would have the technologies and markets it needed. That is why I believe the merger was an extremely
meaningful step for us. Given the impact of the global economic slump, we have yet to see the results we initially expected, but I firmly believe that Pentax’s technologies and business base in the medical field will eventually bear fruit in the future.
While the high-tech industry may be maturing, Hoya can look to the aging societies of Japan, Europe, and theUnited States, and to improvement of infrastructure in newly emerging economies for enormous latent demand in
health care fields such as eyeglasses, contact lenses, intraocular lenses, medical endoscopes, and artificial composite bone. For some of these fields, the market itself is expected to grow in the long term, while in others there
is still room to increase our market share. I therefore believe that there is ample potential for growth.
Hoya has positioned health care as a growth segment for the future. We will work to achieve ongoing growthacross the Group by actively investing management resources in these fields, while at the same time securing
stable earnings from the Information Technology fields by displaying our technological competitiveness.

A Company That Continues to Deliver Value to Society
I believe the role of a company is to exist permanently and provide continuous value to society. As the times
have changed, Hoya has changed its core businesses and products. However, for over half a century we havecontributed to the creation of a prosperous society through the technology of manipulating light.
In order to continue providing the value that society seeks, I have made it my top management priority tosecure sustainable growth by practicing portfolio management to the greatest extent possible. That is why inthe fiscal year under review we took advantage of the merger with Pentax to add a COO from outside the Company. We have thus formed a top management team of four executives: CEO, COO, CFO, and CTO. These four

In developing optimal regional production andsales and promoting globalization, Hoya c­ ontinues
to carry on the corporate philosophy of “changing
with the times and conditions and implementing
selection and concentration.”

HOYA Annual Report 20095

A Message to Our Stakeholders

executives are able to make speedy and efficient decisions in their respective areas of responsibility on everything from management of the expanded Hoya Group to construction of a business portfolio for the future.
Subsequently, at the June 2009 shareholders’ meeting, the number of internal directors decreased from four tothree. At the following meeting of the Board of Directors, five executive officers were appointed, including threeserving concurrently as directors. This was done with a view to enhancing the executive framework. In addition,
we have a governance framework where all the members of the Nomination Committee, Compensation Committee, and Audit Committee are outside directors. Their oversight has contributed to the reliability and transparency of Hoya’s management.
Moreover, in developing optimal regional production and sales and promoting globalization, Hoya continues to carry on the corporate philosophy of “changing with the times and conditions and implementing selection and concentration.” At the root of this is, of course, the management principle of increasing productcompetitiveness and heightening superiority in the market to ensure profitability. In my opinion, it is this philosophy that serves as the backbone of our diverse businesses and flexible business strategy, enabling Hoya tocontinue on as a sustainable company that provides society with solid value.

To Stakeholders
I believe that all of us, shareholders, management, employees, and all our other stakeholders, are in the same
boat: the good ship Hoya. Perpetually raising Hoya’s corporate value benefits all stakeholders, and ultimately
leads to shareholder returns. Raising corporate value—in other words, raising Hoya’s future potential—is thegreatest priority of my day-to-day management.
Going forward, as the business environment will undergo dramatic changes, we will continue to walk theroad to new growth, relying on our impressive technological capabilities and unwavering corporate philosophy. I
hope for your continued understanding and support for Hoya’s management.

Perpetually raising Hoya’s corporate
value benefits all stakeholders

6 HOYA Annual Report 2009

Hiroshi Suzuki

President and CEO

Interview with COO

Through outstanding technologies and diverse
businesses and human resources, we will work
to move f­orward as a global company.
Hiroshi Hamada
Chief Operating Officer

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Our EvolHoya is preparing for a new stage of growth by taking stock of the transforming market and building
an optimal business portfolio.
	Since taking up the position of COO in April 2008, Hiroshi Hamada has been at the helm of efforts
to reform Hoya’s operating structure. Here he discusses the way ahead for the new Hoya and theissues that must be tackled for the Company to move forward.

Profile1982
Yamashita Shinnihon SteamshipCo., Ltd. (currently Mitsui O.S.K.
Lines, Ltd.)
1987
American Life Insurance Company (Tokyo), an AIG company

Question
It has been one year since you took on the role of COO. How do you see Hoya now and the role thatyou should play within the organization?

Answer
For me, this year was the start of a new mission. With the major changes in global markets, it was an exciting time.
Hoya does business in many different fields, and we have many exceptional engineers and technological

1992
Clarke Consulting Group(California, U.S.A.)

specialists. Over the years, the Company has applied numerical management to each business and managed its

1995
Dell Computer Japan K.K.
(currently Dell Japan Inc.)

growth. That history has brought home to me what a special company Hoya is.

2000
President and Representative
Director, Dell Japan Inc., andVice President, Dell Inc. (U.S.A.)
2006
Managing Partner, Revamp
Corporation
2008
Executive Officer and COO of
Hoya (April) and Director (June)

portfolio efficiently through selection and focus across the entire organization, to achieve long-term, rational
I believe that now is the time for Hoya to move into new businesses—we have joined up with Pentax, whichmainly deals in finished products, and in terms of operating environment, the high-tech industry is reaching
maturity. The new Hoya needs not only to leverage its superior development capabilities to create new products
and technologies, but also to enhance overall marketing capabilities, including everything from products andsales strategies based on market analysis to sales, distribution, and after-sales services. By marketing capabilities, I mean creating strategies for how to segment the wider global market and which areas to target for finished products such as eyeglass and contact lenses and Pentax’s cameras and medical endoscopes. For
high-tech parts and materials, it means creating new business strategies while keeping a close eye on themarket for finished products as it undergoes virtually unprecedented change.
If the role of the CEO is to promote business portfolio management based on a medium- to long-term vision,then I believe that my role as the COO is to formulate and implement the strategies that will bring this vision to life.
HOYA Annual Report 20097

Interview with COO

Question
What does Hoya need in order to achieve further growth?

AnswerUp to now, Hoya has emphasized investments in the field of Information Technology. Going forward, I would liketo accelerate investments in human resources and facilities for the broad field of healthcare, including eyeglassand contact lenses, intraocular lenses, and the medical endoscope and new ceramics (bone prostheses) businesses that Pentax has brought to the table, and make that the cornerstone of the next stage of growth.
The slowdown in sales in the Information Technology segment during the fiscal year under review is not asign that Hoya has lost its technological or competitive edge; it was due to stagnation in the global economy
and the sudden slowdown of the IT industry as a whole. Still, even should demand recover at some point, there
will be structural changes to the market environment, and our analysis leads us to believe that it will be very
difficult to return to the type of growth we have enjoyed in the past.
Hoya strives toward speedy and flexible portfolio management. With Information Technology making a
structural shift from growth business to mature business, we will maintain this as a stable source of income andposition health care related businesses as our growth segment—a balanced strategy for growth.

Question
What are the possibilities for the health care related businesses, and what strategies will you use topursue growth?

AnswerConsider that society is aging, both in Japan and in other countries around the world, and interest in health care is
growing. At the same time, there is stable demand from emerging economies as they speed up the creation of
their social infrastructure. For all these reasons and other, the field of health care can guarantee long-term growth.
For example, in the Vision Care segment, over many years of activity Hoya has established a firm businessbase as the No. 2 eyeglass lens manufacturer in the global market. But our market share has plateaued at a little
over 10%, and there is plenty of room left for growth. In eyeglass lenses, market conditions have coupled withincreasing commoditization due to the rise of low-price lenses. We aim to expand the business in this area byshifting gears to cover the entire market, from high-end to low-end. Likewise, with the EyeCity contact lensbusiness, we are not stopping at being Japan’s largest chain of contact lens retail stores. Instead, we are
expanding our sales activities to the Internet and other channels, and making a full-fledged move into the­Chinese market, to further expand and deepen our market.
Finally in intraocular lenses, endoscopes, and new ceramics, we have earned high evaluations from users forthe outstanding characteristics of our products, which bring together cutting-edge technologies in each field.
These markets have clear targets, so we will aggressively implement strategic marketing activities to raise ourpresence in all the major sales countries.

8 HOYA Annual Report 2009

Question
What kinds of structural reforms have you been promoting as COO?

AnswerIn order to implement our new growth strategy, we need to reexamine how we have allocated investments inthe past. We also need to make an exhaustive study of our cost structure during the high-growth years, andbuild a framework that can ensure high levels of profitability amid the changing market.
During the year under review, Hoya focused on rebuilding a lean and efficient business structure. Specifically, we made organizational revisions, such as consolidating and eliminating manufacturing bases, accelerated
transfer of production overseas, and restructured certain operations in the optical lens and other businesses. We
also withdrew from unprofitable segments such as the crystal business, and reduced personnel in line with thesereforms. We have made reduction of inventories and improving the yield rate common themes at all our production sites, and reviewed costs, from materials to outsourcing. We are continuing to reduce SG&A and othercosts as much as possible across the entire Group in order to establish a strong, low-cost operating structure.
Through these initiatives, I hope to cultivate a strong corporate culture in which employees will take thewhole product supply chain into perspective and consider the pursuit of competitiveness as part of their own
jobs as members of the new Hoya.

Question
What are your ambitions for the future, and what message would you like to send to the shareholders?

AnswerHoya will accelerate the pace to take on two challenges going forward: achieving growth balanced between
health care businesses and Information Technology, and enacting reforms aimed at enhancing our responsiveness to the finished products market.
Personally, I am convinced that to realize progress Hoya must develop its diversity. If we want to create astrong company, we have to look to the whole world, crossing boundaries and breaking down customs togather a collection of outstanding people. Going forward, Hoya will strengthen its personnel evaluations
through a fair, merit-based system that does not take nationality, gender, or age into consideration, and speed
up the globalization of our workforce. Diversifying businesses has been a solid tree supporting Hoya’s sustained
growth. As I see it, diversifying our people will add countless branches to that tree, yielding all kinds of fruit inmarkets around the globe.
I am still new at Hoya, so I am not wrapped up in past experience in the Company or preconceived notions.
My only aim is to move ahead boldly with reforms so that Hoya can enjoy a bright future. I hope for the understanding and support of all our stakeholders as we move forward.

Hiroshi Hamada

Chief Operating Officer

HOYA Annual Report 20099

hoya at a Glance

Ratio to Consolidated Net Sales andCore ProductsElectro-Optics Division

36.1%

Information
Technology

Core Products• Mask blanks for the production of semiconductors• Photomasks for the production of semiconductors• Photomasks for the production of LCDs
• Glass disks for HDDs • Optical lenses and materials

Photonics Division

1.4%

Core Products• UV light sources • Laser oscillators• Various types of electro-optical glasses andpolarizing glass products

Vision Care Division

24.4%

Core Products• Eyeglass lenses

Net Sales (Billions of Yen)
250
200
150
100
50
0

2005

2006

2007

2008

2009

2005

2006

2007

2008

2009

2005

2006

2007

2008

2009

2005

2006

2007

2008

2009

2005

2006

2007

2008

2009

12

9

6

3

0

150
120
90
60
30
0

Eye Care
Health Care Division

11.0%

Core Products• Contact lenses• Intraocular lenses (IOL)

50
40
30
20
10
0

200

Pentax*1

26.9%Core Products• Medical endoscopes • Prosthetic bone filler• Digital cameras • Lens units for digital cameras• Microlenses

160
120
80
40
0

*1 The results of Pentax Corporation and its consolidated subsidiaries (hereafter Pentax) prior to its consolidation are included for reference purposes through the fiscal year ended
March 31, 2007. Annual results for the year ended March 31, 2008 include the combined six months prior to the consolidation of Pentax (April 1, 2007 to September 30, 2007) andthe six months following consolidation (October 1, 2007 to March 31, 2008).

10 HOYA Annual Report 2009Operating
Income (Billions of Yen)

Operating Margin (%)

100

40

75

30

50

20

25

10

0

Description of Business
The Electro-Optics Division provides mask blanks and photomasks used in the productionof semiconductors and LCD panels which are embedded in digital equipments such as
personal computers, LCD televisions, digital cameras and mobile phones, as well as cuttingedge glass memory disks and optical lenses to support the miniaturization and enhanced
functionality of those products. Hoya maintains a large global share of each of these markets, based on proprietary technologies at each stage from development to production.
In the fiscal year under review, both sales and profits for this division were down as aresult of lower demand for finished digital products, the steep appreciation of the yen, anddownward pressure on prices.

0

2005

2006

2007

2008

2009

1.0

10

0.8

8

0.6

6

0.4

4

0.2

2

0

0

2005

2006

2007

2008

2009

25

25

20

20

15

15

10

10

5

5

0

The Photonics Division applies optics technologies cultivated over many years to provide
light source devices and equipment that utilize lasers and UV. Many of these products areused in manufacturing processes for semiconductors, LCD panels and digital cameras, thedivision’s business enjoys the benefits of positive synergies with the Electro-Optics Division. The Company also expects to see growth in the polarizing glass products business,
which began commercial operation in the year under review.
In the fiscal year under review, laser equipment performed strongly in the first half as
LCD manufacturers expanded capital expenditures. In the second half, however, orders
declined amid a rapid slowdown in the digital products market, and the division recorded
both lower sales and profits.

The Vision Care Division is engaged in manufacturing and sales of eyeglass lenses in
global markets with a focus on four regions: Japan, Europe, North America and AsiaPacific. The IT system linking the factories and sales points enables the division to deliver
high-value-added lenses to customers around the world quickly and efficiently. The Company holds the top market share in Japan.
In the fiscal year under review downward pressure on prices increased, particularly inJapan and Europe. Nevertheless, the division secured growth in profits by enhancing pricecompetitiveness through enhanced efficiency in special order production, as well as active
introduction of new products.

0

2005

2006

2007

2008

2009

12

30

8

20

4

10

0

The Health Care Division is responsible for the development of the over 150 Eye City
stores, Japan’s largest chain of contact lens specialty stores, serving a total of 6 million
customers to date. It also manufactures and sells intraocular lenses (IOLs) used in thetreatment of cataracts.
In the fiscal year under review, the division ramped up its high-quality consulting sales
and after care service, maintaining a stable customer acquisition from the previous year.
Meanwhile, steady demand for IOLs contributed to increases in both sales and profits. In
addition, the division received approval from the U.S. Food and Drug Administration (FDA)
for its IOLs, and has increased the speed of full-fledged development.

0

2005

2006

2007

2008

2009

6

5

0

0

–6

–5

–12

–10

2005

2006

2007

2008

2009

The Pentax business leverages its optics and precision processing technologies to develop
and sell a broad selection of products, including medical devices, digital cameras, lensunits for digital cameras, and microlenses. In the medical devices market, the division is
focusing on endoscopes with the expectation that medical care will progress and themarket will grow in the long-term. In cameras, the Company is working to develop uniqueproducts based around the globally recognized PENTAX brand.
In the fiscal year under review, sales fell significantly in the second half of the year due tothe slowdown in demand for digital cameras and lower product prices. Currency exchange
rates had a major impact on overseas sales, which account for a large proportion of total
sales, resulting in a significant decrease in revenue. The digital camera division performed
poorly, resulting in both lower sales and an operating loss for the division.

* Other businesses have not been included in this “HOYA AT A GLANCE” section. In addition, as part of its efforts to strengthen management and improve profitability, effective
March 31, 2009 the Hoya Group has withdrawn from the crystal glassware business, which was previously listed under “other businesses.”
HOYA Annual Report 200911

Information Technology
Hoya contributes to an abundant and prosperous future through advanced technology supporting progress in the functionsand value-added content of digital products, such as personal computers and large flat panel LCD televisions.

Electro-Optics Division

the steadily worsening business climate surrounding the semiconductor industry, individual companies are limiting their investments

Mask Blanks for
Semiconductor Production
Fiscal 2009 Business Overview and Resultsin chip development and focusing their efforts on building cost-

Hoya produces photomasks, which are the master plates used toseeking other ways of increasing the degree of satisfaction of its

transfer the semiconductor circuit patterns to silicon wafers, and thecustomers besides its miniaturization-oriented product develop-

mask blanks that form the substrate for the photomasks. The Com-

ment by providing customers with added value. Its efforts havepany supplies these products to semiconductor manufacturers inincluded material development to further heighten the durability

Japan and overseas and boasts an overwhelming share of the globalof its products.

conscious, efficient production systems.
In recognition of these market needs, Hoya’s strategy has beenmarket for mask blanks, particularly high precision mask blanks.

economic slowdown that began in the second quarter, however, thePhotomasks for
Semiconductor Production
Fiscal 2009 Business Overview and Results

second half witnessed large-scale reductions in production and

A photomask is a mask blank onto which a pattern has been drawn

curtailment of product development budgets and capital invest-

with an electron beam or laser writing device. Hoya has developed

ments in the industry. Amid these market movements, sales of maska highly competitive business model in the photomask market,

blanks fell in the second half because of the sharp drop in demandstrongly developing the business by specializing in cutting edge

and pressure on prices, producing an overall decline in sales year

technology development and by taking advantage of in-houseon year. Even high precision products, such as the phase-shift mask

mask blank operations to differentiate itself from competitors inblanks*1 that had driven earnings growth in the past, faced a dif-terms of its material processes.

In the fiscal year under review, business in the semiconductor
industry was robust during the first half. Against the backdrop of an

ficult business environment.

In the fiscal year under review, Hoya put effort into providing
high-quality, cutting edge photomasks. Although there were some

Future Strategies

successes with the introduction of new types of photoresist films

Despite steady progress in cutting edge semiconductor develop-

and mask blank materials compatible with cutting edge manufac-

ment, mass production of the devices utilizing these chips haveturing processes for semiconductors, such as immersion lithogra-

slowed the pace at which the industry shifts to the next generation

phy, adverse business conditions such as stagnation in theof semiconductors. Consequently, a clear gap has opened up

semiconductor market, a slump in demand for photomasks andbetween technology progress and market needs. Furthermore, withdownward pressure on prices resulted in lower sales year on year.

Illustration of circuit patterntransfer using a lithographic
exposure process during semiconductor production

Light source

Condenser lensPhotomask

Reduced projection
exposure lens unit

Wafer
(semiconductor chip)

12 HOYA Annual Report 2009

Mask blanks
From the left: a glass substrate, a phase-shift halftone
mask blank, a homogenous
metallic film coated layer anda completed blank with photoresist coating.

Future Strategies

In the fiscal year under review, LCD panel manufacturers contin-

One of the trends in the photomask market is the continued decline

ued to actively increase capital investment in anticipation of a surge

in overall demand resulting from customers reducing the types ofin demand related to the Beijing Olympics. Accordingly, Hoya fared

products used. In turn, this trend arises from a movement towards

well in the first half. However, in the second half, lower demand thanconcentrating manufacturing in fabs (chip manufacturing specialists)

expected from the Beijing Olympics and lagging consumption

and corporate reorganizations in the semiconductor industry. In

because of the economic downturn following the Lehman Brothers

recognition of these trends, Hoya is focusing more than ever before

shock resulted in LCD panel inventory levels being substantiallyon maintaining close relationships with customers. The Company

higher than demand. Consequently, the Company experienced asees its highest priority issue as providing customers with optimum

sharp decline in demand beginning in the third quarter along withsolutions as their partner for advanced technology development.

continued strong downward pressure on prices. Overall sales fell

Going forward, Hoya intends to stay ahead of competitors withcompared with the previous fiscal year.

the latest next-generation lithography equipment, introduced in
the fiscal year under review, working to further strengthen its com-

Future Strategies

petitiveness. In addition, the Company is utilizing correction tech-

In the past, LCD panel manufacturers have mainly relied on increas-

nology for writing processes and simulation technology to

ing the size of the glass used as a substrate to improve their pro-

duplicate semiconductor exposure processes to provide its own

ductivity. Today the new challenge is to pursue further gains inoriginal high-value-added solutions.

productivity with an eye to achieving cost reductions within the
manufacturing process. Within that trend, Hoya’s multi-tone mask*2

Photomasks for LCD Panel Production
Fiscal 2009 Business Overview and Results

is a breakthrough product that promises to lower manufacturing

Hoya manufactures LCD photomasks, which are the master plates

of processes in LCD manufacturers’ production lines and increasingused in the manufacture of LCD panels for flat-panel televisions andyields. In the fiscal year under review, the Company implemented

computer monitors.

improvements to the defect rates and degree of precision of multi-

costs through its significant contributions to reducing the number

Hoya has leveraged several advantages in winning top share oftone masks, focusing on differentiating its products in the market.

the global market for LCD photomasks. It supplies high-value-added

Hoya also began such activities as utilizing inspection technology to

products that utilize technology accumulated in the development ofraise the quality guarantee level for its LCD photomasks. Moving

photomasks for semiconductors. It also has a tripolar production

forward, the Company intends to take the initiative in the market bysystem featuring hubs in Japan, Taiwan, and South Korea thatdeveloping and proposing technologies that will be valued by LCD

enables rapid response to customer needs.

panel manufacturers seeking to improve productivity.

8th generation photomasks(1,220mm X 1,400mm)
An 8th generation glass substrate can yield screens for six
50-inch LCD TV panels.

*1 Phase shift mask blanks
These mask blanks have a semi-transparent film coating
between the glass substrate and a metallic film layer thatenables the printing of smaller circuits. High-value-added
products that increase the functionality of devices andenables greater miniaturization, phase shift mask blanks arecontributing to the greater profitability of the business.

*2	Multi-tone masks
Multi-tone masks can reduce the number of processes usedin LCD panel production from five to four. Consequently,
they contribute to reducing the manufacturing costs of LCD
panel manufacturers and increasing their productivity.

HOYA Annual Report 200913

Information Technology

Glass Memory Disks for Hard Disk Drives
Fiscal 2009 Business Overview and Results

conjunction with this development, the Company augmented its

Hoya produces glass memory disks used as recording media for

In September 2008, Hoya concluded a basic agreement withhard disk drives (HDDs) and the glass substrates used to produce

Showa Denko K.K. on merging the two companies’ HDD recording

them. The Company mainly manufactures 2.5 inch disks, which are

media-related businesses. After the agreement, the two companies

incorporated into HDDs and used in notebook computers. Hoya’s

continued to make progress with discussions, but terminated nego-

substrates boast top market share, demonstrating competitivenesstiations in March 2009 because of the sudden deterioration in eco-in all the major aspects of quality, cost, and production capacity.

nomic conditions and changes in the business environment.

state-of-the-art mass production line at its Vietnam plant.

Along with the growing needs for larger HDD memory capacity,
there has been a demand for higher precision and zero defectFuture Strategies

features for substrates and higher storage capacities for glass

Unit sales volume in the HDD market is anticipated to continue tomemory disks. Hoya avails itself of technology capabilities built up

grow, particularly for use in notebook computers. The market willover the years to continue to meet the demands of the market.

also likely continue to demand that Hoya and other component

In the fiscal year under review, there was strong demand for
Hoya’s products as consumers began to replace their desktop computers with notebook computers. In addition, growth in sales ofmanufacturers make further progress with greater storage capacities and lower costs.
Through next-generation R&D programs and production tech-

Internet books and other compact, low-price personal computers

nology development, Hoya will concentrate on proposing new

also drove up demand for HDDs. At the end of the third quarter,

products, boosting quality, and achieving cost reductions. The

cumulative unit sales of substrates and glass memory disks had

Company will take steps to establish an organization that can

expanded year on year. In contrast, the sudden drop in demand inensure low-cost and stable supplies of substrates. It will further

the fourth quarter due to the production cut backs and the related

expand its substrate production facilities, taking demand into con-

downward pressure on prices as well as the impact of exchange

sideration in its timing, and prepare those facilities for the shift torate fluctuations resulted in unit sales and sales for the full year

next-generation products. Hoya also intends to increase the value-

declining compared with the previous fiscal year.

added content of its glass memory disks based on next-generation

During the fiscal year under review, Hoya completed develop-

technology that utilizes discrete tracking and other technologies.

ment of a new product that uses high precision polishing of thesurface of the substrate to enable greater storage capacity. In

Substrates (transparent disks)and glass memory disks
Substrates are transparent, highly
polished glass plates that can becoated with magnetic recording film
to produce glass memory disks.
Hoya ensures quality right from thematerials stage, choosing the
optimum melting, molding, andpolishing methods. The resulting
products feature high shock resistance produced through the use of
special strengthening technologies.

14 HOYA Annual Report 2009

Discrete tracking technology
By making grooves of nonmagnetic material between
recording tracks, this technology
reduces the incidence of noise
between neighboring tracks,
thereby permitting increases indata recording density.

Optical Lenses
Fiscal 2009 Business Overview and Results

Future Strategies

Utilizing a complete production system capable of manufacturingmarket, strengthening cost competitiveness is the chief issue being

everything from material glass to processed optical lenses, Hoya

addressed by Hoya. At the same time, the Company does not

supplies high-value-added optical products that are used in opticalintend to let up on its product and technology development efforts.

devices such as digital cameras and video cameras.

While making further progress with development of new optical

Since price declines are expected to continue in the digital products

In the fiscal year under review, the digital products market wasmaterials, it is concentrating on establishing a stable supply organi-robust in the first half, but end-user demand dropped in the second

zation capable of meeting customers’ quality and cost requirements.

half under the impact of the economic downturn. Starting in the

To strengthen cost competitiveness, Hoya primarily worked tothird quarter, manufacturers implemented sharp production cut-

reduce fixed costs during the fiscal year under review. In future, thebacks. Strongly affected by the large-scale declines in orders andCompany will also strengthen its profit structure by improving pro-the falling market prices, sales of the Company’s optical lenses

duction efficiency, reducing such variable costs as outsourcing anddeclined from a year earlier.

materials expenses, and improving product yields.

Hoya’s aspherical molded lenses— its forte— have contributed

Among other activities, Hoya has established the Technology

much to the digital device market, particularly to making compact

Center within Akishima Plant, the Company’s main domestic base.

digital cameras smaller and lighter and with greater picture defini-

The center is being used to enhance the Company’s advanced

tion. During the fiscal year under review, the Company supplied thetechnology development programs and to provide production

market with high-value-added products, such as concave meniscus

technology guidance to Hoya’s overseas plants.

aspherical lenses, and developed and introduced new types of
optical glass demonstrating special optical properties. Moreover,Hoya began to expand orders for medium- and large-diameter
optical lenses for digital single lens reflex (SLR) cameras. However,the sudden deterioration in the market resulted in sales falling
below original expectations.

Aspherical molded lenses
Aspherical molded lenses haveexcellent aberration correction
properties, which enables theuse of fewer lenses. By increasing the degree of freedom in
optical design, this feature
contributes to more compact,
lightweight, and functionallysophisticated optical products.

HOYA Annual Report 200915

Information Technology

Photonics Division

Since the UV light source market saw overall cutbacks in capital
expenditures by the manufacturing industry throughout the year,

Fiscal 2009 Business Overview and Results

business conditions were arduous in the fiscal year under review. On

In the Photonics Division, Hoya applies its own optical technologies

the other hand, specialty glasses continue to be highly evaluated by

to manufacture and develop such products as laser oscillators anddomestic customers as high quality products with superior fabrica-

UV light source devices. Principal products include the defect cor-tion precision and sales were also firm overseas. Overall, specialty

rection equipment and laser oscillators for precision processing,glass supported the division’s performance during the fiscal year

which are used to assist analysis aid processing during semiconduc-under review. In the newly transferred polarized glass business, work

tor and flat-panel display (FPD) manufacturing process, as well as

on developing new customers progressed. This business is expected

UV light source devices used in the UV resin bonding of such opti-

to grow along with capital investments in infrastructure overseas andcal parts as optical pickups and camera modules. The Company

the growing popularity of fiber to the home (FFTH) in the opticalalso provides color filters that are used in various optical equip-

communications field.

ment, as well as specialty glasses for industrial and other applications. During the fiscal year under review, Hoya transferred its

Future Strategies

polarized glass products business from the R&D Center to theUnder the impact of the down turn in the global economy, thedivision to begin full-fledged commercialization of these products.

division’s core customers—semiconductor, LCD, and optical device

In the first half, demand for laser oscillators expanded on the

manufacturers—are curtailing capital investment. Clearly, there will

strength of robust capital investments by LCD panel manufacturers.

be hardships again in the current fiscal year. In response, the divi-Entering the second half, however, capital investments by customers

sion will endeavor to increase business efficiency through structural

declined under the impact of the economic slowdown following thereform and revision of its organization and systems. At the same

Lehman Brothers shock, causing a sharp drop in Hoya’s orders. UVtime, it will continue to meet the needs of its customers by making

light source devices are used in bonding processes for a variety of

maximum use of its proprietary technology in supplying a broad

electronic and optical components, such as optical communications

product lineup offering even higher functionality and ease of use.

components, semiconductor wafers, LCD panels, and optical disks.

UV-LED spot light source(EXECURE-H-1VC)
In assembling tiny elements ofelectronic and optical devices,
it is typical to use UV light froma mercury lamp for setting. In
recent years, however, there has
been progress toward practicalapplication of ultraviolet LEDs.
Hoya’s UV-LED spot light sourceis one such unique product,developed with technologies
accumulated through theCompany’s experience in fiber
optics.

16 HOYA Annual Report 2009

Polarized glass (CUPO)This polarized glass material isused in optical isolators for
optical communications.
Demand is expected to grow as
optical communications networks reach global scales.

Eye Care
Hoya’s Eye Care business provides a wide range of eye-related products and services worldwide. Based on years of experience in optics and materials technology, we develop, manufacture and sell eyeglass lenses, contact lenses, and intraocularlenses for use after cataract surgery.

Vision Care Divisionindex lens. In the price-sensitive single-focus lens market as well,
we focused on sales of REMARK, rolling out measures to help resist

Eyeglass Lenses
Fiscal 2009 Business Overview and Results

price competition. Nevertheless, earnings declined year on year.

Hoya manufactures and sells eyeglass lenses on a global basis,

Europeoffering products ranging from standard lenses to high-value-added

The European market also saw stronger downward price pressure,lenses tailored to the vision needs and lifestyle of each individualwith apparent growth in the market for lower-price-range lenses.

customer. We utilize IT systems to link eyeglass retail stores to our

Hoya saw robust sales of Hoyalux iD MyStyle high-grade progres-production bases, thereby achieving an efficient supply chain forsive lens and Hoyalux iD Lifestyle, primarily in Western European

customers around the world.

countries. In the single-focus lens market, we expanded sales ofIn the fiscal year under review, consumption faltered under the

NULUX Active, which offers a more comfortable range of vision. We

shadow of the global economic slowdown. Against this backdrop,

also strengthened our service and support offer to eyeglass retailthe eyeglass lens market saw prices fall and products grow increas-

stores through consultation and dispensing tools like the MyStyle

ingly commoditized. In this environment, Hoya focused on devel-

Identifier and Visureal, which help select lenses that meet customer

oping high-quality premium lenses and on improving priceneeds. As a result of these efforts, sales volume rose year on year.

competitiveness by enhancing mass production facilities andSales also grew steadily in Poland, Hungary, and other countries inSuper RX Labs (special processing plants), with the twin aims of

the Eastern Europe region.

expanding market share and improving profitability.
North America
Japan

In the United States, where consumption dropped considerably in

The eyeglass lens market in Japan is continuing to contract overall

light of the Lehman Shock, Hoya continued efforts to strengthen

under the growing impact of low-priced lenses produced in China

sales to independent eyeglass retailers. As a result, we were able toand other Asian countries. In response to these conditions, Hoya

boost sales volume for Hoyalux iD Lifestyle and other high-value-

introduced the Hoyalux Trinity premium progressive lens product,

added products like special coatings, and saw results on a par withexpanded sales of high-function coatings and the EYVIA 1.74 high-the previous year. In Canada, meanwhile, sales volume was

Hoyalux Trinity/
Hoyalux iD MyStyle/
Hoyalux iD LifeStyle
Created using Hoya’s proprietary FreeForm technologies,
these multifocal progressive
lenses are customized toensure optimal performance
tailored to each customer’sprescription and lifestyle. The
brand is sold under different
names in Europe, the UnitedStates and Japan.

Nulux Active
These new-concept lenses use
advanced optical design principles to enhance comfort andhigh-mobility vision for single
vision patients. Because it takes
into account all types of eye
motion, this strategic product isaimed at young people who
make active use of their eyes.

HOYA Annual Report 200917

Eye Caresignificantly higher year on year. In terms of new markets, we madeFuture Strategies

preparations for future growth, establishing a lab in Brazil as a joint

We expect the polarization of the eyeglass lens market in devel-

venture with our distribution partner, and opening a representative

oped countries to become further pronounced, with aging popula-office in Argentina.

tions fueling growth in the higher price ranges such as progressive
lenses, alongside growth in the lower-priced products. In newly

Asia-Pacificemerging markets, we expect increased volume to meet population

In China and Southeast Asian countries, earnings grew due togrowth, and qualitative improvements as a result of higher demandhigher sales of REMARK new concept lenses and photochromaticfor high value-added lenses as economic development progresses.

lenses that darken automatically when exposed to sunlight. China,

In order to secure future growth on a global basis, Hoya will

India, and other markets experiencing striking economic develop-

work to improve profitability through sales of high-­valued-added

ment are seeing rapid growth typified by the entry of eyeglass retailproducts and expand market share by also providing low-priced

chains. Because further growth is highly likely going forward, we

lenses. To support this strategy, we will establish an efficient supply

targeted future business expansion by focusing on the enhance-system with production that leverages the strengths of each mass

ment of educational programs for eyeglass retail stores, and on

production facility and country lab.

other means of strengthening relationships with customers. In

Further, in markets with growth potential such as Eastern­Australia, although the market felt the impact of the economic

Europe, Russia and Asia, we will continue to accelerate growthrecession in the second half of the year, overall sales for the year

through M&A, direct investment, and strengthening of educational

showed firm growth.

programs for eyeglass retailers.

Beijing Olympics Gold Medalist Tia Hellebaut and Hoya NULUX EP
Hoya Lens Belgium, N.V. has a sponsorship contract with Olympic women’s high-jump gold
medalist Tia Hellebaut. The eyeglass lenses she sports during competitions are Hoya Nulux EP
1.67 high-refractive index plastic lenses with SFT coating (frames are by a Belgian manufacturer).
Hoya Nulux EP (“REMARK” in Japan) are double-sided aspherical lenses, which both enable
lenses to be thinner than conventional spherical lenses, but also broaden the wearer’s field ofclear vision.

18 HOYA Annual Report 2009

Health Care Division

Hoya entered the Chinese market in 2005. As of March 31, 2009,
there were seven Eye City stores in Shanghai, and all had won

Contact Lenses and eye city
Fiscal 2009 Business Overview and Results

strong support for their outstanding eye-testing technologies andhigh level of service.

Hoya operates the Eye City chain of contact lens specialty stores,
one of the largest such chains in Japan. The strengths of this chain

Future Strategies

lie in consulting-based sales, which provide the lenses best suited

In the Japanese market, Hoya will accelerate store development.

for each customer, and in the broad selection of products fromThe Company is seriously considering expanding its sales area tofamous manufacturers around the world. With approximately 150

the Chubu and Kyushu regions besides major metropolitan dis-locations nationwide, the cumulative number of customers sur-tricts. It is also looking to store locations that customers will findpassed 6 million through the end of the fiscal year under review.

convenient and reviewing store designs. In terms of sales promo-

During the fiscal year under review, the retail market for contact

tions, the Company will augment traditional methods by making

lenses saw moderate growth, centered on disposable lenses. How-use of the Internet and other digital media in its marketing activities

ever, business conditions remained challenging, with all contact

to efficiently target a broad customer base. Moreover, by strength-

lens retailers facing difficulty in opening new stores due to a decline

ening human resources through recruitment and training, and opti-

in the number of ophthalmologists starting business because ofmal deployment, the Company will expand services and increase

revisions to fee standards for medical exams under the nationalcustomer satisfaction.

healthcare system annually since 2006.

In China, the scale of the contact lens retail market is currently

Hoya made efforts to strengthen sales of high-value-added

estimated at around ¥70 billion. This market has not yet matured,

products such as lenses made from new materials, lenses for astig-

with fewer people wearing contact lenses than in Japan. Growth ismatism and bifocal lenses, and worked to improve its service. As atherefore expected in the future. Hoya will promote localization,

result, although there was no growth in the total number of stores,

while at the same time opening strategic new stores and conduct-

existing stores increased the number of new and repeat customers,

ing vigorous PR activities to raise recognition of the Eye City store

leading to a year-on-year rise in sales. In addition, management

brand mainly among women in their teens and 20s, the main target

efficiency was improved again through detailed pricing strategies

customer base. In this way, the Company will raise its presence as

and a scrap-and-build strategy of opening new stores and closing

the market grows.

existing ones according to detailed sales area analysis.

Eye City
At Hoya’s Eye City chain, experienced professionals armed withthe most accurate and latest knowledge of vision conduct sales
consultations with individual customers. The store concept is
identical in both Japan and China.

HOYA Annual Report 200919

Eye Care

Intraocular Lenses (IOL)
Fiscal 2009 Business Overview and Results

construction to expand production capacity in the Singapore fac-

Intraocular lenses (IOL) are artificial lenses used to replace clouded

tory, strove to secure a low-cost, stable supply framework, andlenses during cataract surgery. Inserting these lenses into thepressed ahead with development and trial production of new prod-

affected eye can restore vision. Over many years of research into

ucts and materials for IOLs.

optical design and high-­function materials, Hoya develops andIn addition, as business expanded, the Company conducted

In September 2008, the iSpheric™ yellow acrylic foldable intraoc-

provides unique IOL products that meet the needs of doctors prac-ular lens was approved by the U.S. Food and Drug Administration

ticing on the frontlines of medicine.

(FDA), and Hoya became the first Japanese manufacturer to enter

Hoya’s foldable soft lenses can be folded into a small package,

the U.S. market for intraocular lenses, estimated to be the largest in

enabling delivery into the eye through a very small 1.8mm incision,

the world. In April 2009, the Company began more full-fledged mar-the smallest in the world. Moreover, the pre-loaded iSert delivery

keting activities in the United States. In the previous fiscal year, Hoya

system, which offers superior operability compared to previoustransferred its operations headquarters to Southern California, whereones, is contributing to the progress of medicine as a solution forworld-renowned ophthalmologists conduct ­cutting-edge research.

enabling safe, accurate cataract procedures.

Taking FDA approval of the lenses as the impetus to accelerate cre-During the fiscal year under review, Hoya launched an aspherical pre-loaded IOL in the Japanese market. With focus on introduc-ation of a sales structure in the United States, Hoya is now working to
expand its business with a global focus.

tion and sales of the new product to medical institutions of all
types, the Company was able to maintain strong sales from the

Future Strategies

previous fiscal year.

As society ages, the number of cataract suffers in developed coun-

Outside of Japan, the Company focused on the launch of ultra-

tries is rising sharply. Developing countries are also seeing growthsmall incision type IOLs and expanding sales of the iSert system inin the number of cataract patients seeking care as their economies

developed countries, mainly Germany and France, and succeeded

rapidly expand. IOLs are therefore expected to see market growth

in raising market presence. In the Asia-Pacific region, there wasworldwide. Hoya will pursue this growth opportunity by promoting

steady progress in introducing new products, with a focus on China,

R&D to enhance product functionality.

South Korea and ­Australia. These measures resulted in high growthand strong results.

Yellow acrylic intraocular lensThese yellow intraocular lenses
absorb ultra-violet light, areeasy on the retina, and provide
natural color tones. In 1991,
Hoya became the first in theindustry to release coloredintraocular lenses.

20 HOYA Annual Report 2009

The pre-loaded iSert delivery
systemThis disposable injector comeswith an intraocular lens preloaded. In addition to reducing
the amount of work required
during surgery, it does not
require washing or sterilizationof related tools, facilitating
cataract surgery.

Pentax
The Pentax brand is recognized around world. Based on this brand, Hoya is making steady progress in uncovering new
possibilities for the future in the fields of cameras and medical devices.

Lifecare BusinessIn the fiscal year under review, sales of the EPK-i series of endoscopes with megapixel-level resolution continued to post robust

In the Lifecare Business, we provide clinicians with high-resolution,

growth in the European and North American markets. In May 2008,high-usability endoscopes and new ceramics products for medical

the series was also launched in Japan, where it made a strong start,use, contributing to the enhancement of both medical care andearning kudos from physicians for its clear imaging. Overseas sales

patient QOL (Quality of Life).

rose in the first half of the year, led by Europe. In the second half ofthe year, however, even medical institutions began curtailing new

Endoscopes for Medical Use
Fiscal 2009 Business Overview and Results

investments amid the economic slowdown, resulting in lower sales

In the medical devices field, Pentax develops high-quality flexibleof sales of these products are generated in North America andendoscopes for medical use and medical accessories (surgical

Europe, sales were greatly impacted by currency exchange rates.

compared to the previous year. In addition, because a large portion

instruments for endoscopes), primarily for the gastrointestinal
system and sells them in Japan, North America, and in European

Future Strategies

countries. Because flexible endoscopes are inserted into narrow

Under the basic strategy of strengthening communication withand convoluted luminal spaces, they must have superb operability

doctors, we will establish specialized teams to develop new cus-

to enable doctors to achieve precise manipulation, as well as high-tomers in key regions, and further enhance collaboration among

resolution image processing to allow doctors to determine whichdevelopment, production, and sales divisions and overseas sales

areas are affected by cancer or other diseases. Pentax utilizes its

companies. We will also work to enhance product lineups to meetmany years of experience in optomechatronic technology to

the needs of university hospitals, clinics, and each region.

achieve these capabilities.
Endoscopes enable diagnosis and treatment without placing a

In terms of development, the Company is focused on developing products from the user’s perspective and uncovering latent

heavy burden on patients’ bodies, and help keep down healthcaredemand through constant, close contact with the medical commu-

costs by facilitating early detection and treatment of various condi-

nity. We will also actively participate in joint research with universi-

tions. For this reason, these tools are being actively introduced as aties and companies in Japan and overseas.

minimally invasive method of treatment at medical institutions
across the globe.

Through these activities, we aim to increase total customer satisfaction, from product development to sales and after-sales service.

The EPK-i endoscope system

EG-2790i scope

The EPK-i endoscope system
combines the high-resolution
EPK-i video processor and the
90i video scope equipped witha megapixel CCD. Thanks tohigh-definition imaging and the
proprietary i-scan image processing function, the system
supports advanced endoscopic
testing and diagnosis.

This high-grade scope achieves
dramatically high resolution
through use of a high-definition
CCD, and with a diameter of
9.0mm is ultra-light and slim
enough for routine testing.

HOYA Annual Report 200921

Pentax

New Ceramics
Fiscal 2009 Business Overview and Results

Imaging Systems BusinessPentax has captured a high market share in apatite products for use

Fiscal 2009 Business Overview and Resultsin such fields as orthopedics, brain surgery, and dentistry. TheseIn the fiscal year under review, the market for digital cameras took a

include biocompatible ceramic products APACERAM and BIOPEX-R

sudden turn, shifting from robust conditions in the first half of thepaste. The former is used as a prosthetic filler for bone defects,

year to harsh conditions from the third-quarter onward. This about-while the latter offers enhanced bonding performance.

turn was caused by the global economic slowdown centered on the

Pharmaceutical manufacturers around the world are employing

United States, the main demand driver in this market. The recession

the special protein adsorption characteristics of CHT ceramic

resulted in softer demand for both SLR and compact digital cam-hydroxyapatite (chromatography media) as a bulking agent ineras, leading to higher inventories and rapid price declines.

­biopharmaceutical manufacturing and separation processes.
The composite bone market is continuing to grow gently,

Under these conditions, we introduced distinctive products
grounded on our many years of optical design technology. Thesemainly in the Japanese market, and the new ceramics division is

products were smaller and lighter, and offered better dust-, moisture-seeing firm growth in sales.

and water-resistance than previous models. The PENTAX Optio W60
compact digital camera (released in June 2008) recorded particularly

Future Strategies

strong sales; this product is capable of two hours of continuous

We will work to expand the composite bone business, particularly

underwater recording at a depth of 4 meters. In entry-class digitalin the spinal field. We will also make active efforts to expand the

SLR cameras, in October 2008 we released the PENTAX K-m, whichbusiness through collaboration with other manufacturers in Japan

features a compact, light-weight body and intuitive operation,and overseas to develop new products with better absorbability

enabling even novice users to take pictures with ease. This cameraand strength and to enhance competitiveness.

was well supported by women and families. In January 2009, we

We are currently stepping up efforts to commercialize products.
We are bringing to market new absorbable composite bone products and BIOPEX-R, which offers improved solidification rates, andcreated excitement in the market by also releasing a limited-edition
white model of the PENTAX K-m.
In terms of product strategy, we emphasized both market posi-

introducing a composite bone for the spine that incorporates tita-

tioning and sought to establish a low-cost operating structure innium materials.

light of the challenging business environment. We moved quickly to

To prepare for growth, we are conducting full-fledged organiza-

implement early structural reforms, including integrating and elimi-

tional reforms aimed at optimizing development, production, andnating manufacturing bases in Japan and transferring production

sales divisions.

lines overseas. We also undertook a review of all costs. Despite

22 HOYA Annual Report 2009

Apatite products

PENTAX K-7

Hydroxyapatite has nearly thesame composition as humanbone, and can be safely
inserted into the human bodyfor the long-term, eventuallyfusing with the bone to become
part of it. Thanks to its safe
profile for use with living tissue,
this material is being used indevelopment of a wide rangeof bone-related applications.

A wealth of advanced technologies are packed into the highly
mobile compact body of thistop-end model.

PENTAX K-m
This entry-class SLR includes
useful functions such as shake
reduction and automatic scene
recognition.

these efforts, however, sales in the Imaging Systems business fell

Optical Components Businessyear on year against the backdrop of worsening market conditions.

Small-Size Lenses
Future Strategies

In this business, Pentax manufactures and sells DVD/CD-­

We will promote further cost-structure reforms by continuing tocompatible hybrid lenses, Blu-ray pickup lenses, and plastic lensenhance production efficiency and to rigorously cut fixed costs

units for digital cameras.

across the board, from materials to personnel.

During the fiscal year under review, manufacturers of finished

In product development, we are working to differentiate ourAV equipment conducted production adjustments in response to

products by leveraging the Pentax brand and creating productthe slump in consumption from the third quarter on. The sudden

development roadmaps that accurately reflect market needs.

decline in demand resulted in lower earnings for this business.

Meanwhile, we are pursuing a wide range of possibilities, includ-

In light of the expected growth of the Blu-ray market, Pentax is

ing alliances with other companies, as we strive to accelerate theworking to enhance technological development and bolster its

process from development to commercialization.

lineup. Going forward, we will also focus on developing production

In digital camera products, we are using Pentax’s outstanding

technology to ensure a stable supply of high-precision lenses, asfeatures that enable shooting in different environments—including

well as strive to improve yields and reduce costs. The company iswater-, moisture- and shake-resistance and durability—to create uniquecurrently undertaking efforts to raise the efficiency of operations

products guided by the core concept of “outdoor” photography.

through reviews of organizational structures and production bases.

Planning and development have proceeded based on this new

At the same time, it is taking the merger with Hoya as an opportu-

concept, and in June 2009 we released the vanguard K-7 model.

nity to look at what synergies can be derived in respect of plastic

Full of functionality, it has drawn attention from a broad user base.

materials and new processing technologies.

In interchangeable lenses as well, the merger with Hoya createdan integrated system for development and production, from glass

Lens units for digital cameras

materials to lens modules. Going forward, we will capture synergies

Pentax has begun production of optical lens units for digital cam-to deliver new value.

eras, and is supplying custom-specified lenses to digital camera
manufacturers and their ODM and OEM partners both in Japan andoverseas. In particular, Pentax’s patented sliding lens system has
contributed greatly to reducing the size of compact digital cameras
with high-zoom lenses. Going forward, the Company will focus ondeveloping lens modules with limitless possibilities.

Optio W60

Blu-ray objective lens

The slim, light-weight body of the
Optio W60 is fitted with a 28mm 5x
optical zoom lens.
It is the first compact digital camera
capable of two hours of continuous
underwater shooting at depths of up
to 4 meters.

This product uses ultra-highprecision molds and shaping
technology to achieve stableperformance even from aplastic lens.

Sliding Lens System
A central lens block slides into place when thelens is in storage position, enabling the creation of compact cameras with a high-power
optical zoom.

HOYA Annual Report 200923

Corporate GovernanceTransparent Governance
Hoya separates management execution and oversight functions

Board of Directors

with a view to increasing management efficiency. Furthermore,

The Board of Directors comprises five outside directors andin order to ensure that management is not based upon internal

three internal directors, for a total of eight directors. The Board

corporate logic alone, the Company has also put in place ameets every month, excluding February and August. At meet-highly transparent corporate governance system with active

ings, outside directors draw on their ample management expe-

participation by outside directors who perform a supervisory

rience and international perspectives to supervise and offer

role from the shareholders’ perspective.

advice to the executive officers in the execution of their duties
from a wide range of viewpoints.

Corporate Governance Framework
In June 2003, Hoya moved to a “company-with-committees”

Internal directors serve concurrently as executive officers.
Authority has been further devolved from the executive officers

management system as defined under the Companies Act ofto the heads of each business division, who are responsible forJapan, establishing three committees—the Nomination Com-

day-to-day business operations in their respective areas of activ-

mittee, the Compensation Committee and the Audit Commit-

ity. These division heads make detailed reports on each division’s

tee—each distinct from the Board of Directors. The Companies

status to the executive officers at monthly business reporting

Act of Japan stipulates that a majority of the members of thesemeetings, at which strategies for responding to each issue arecommittees be outside directors; at Hoya, the committees are

discussed. Important matters are all reported to meetings of thecomposed exclusively of outside directors. Within the company-

Board of Directors in order to ensure soundness of management.

with-­committees framework, this system enables delegation of­decision-making authority from the Board of Directors to the

The Three Committees

executive officers so that they can focus on speedy and efficient

The Nomination Committee, Compensation Committee andmanagement toward realizing improved business performance.

Audit Committee are composed exclusively of outside direc-

At the same time, the three committees composed of outside

tors, who are assured independence from the executive officers,

directors provide enhanced powers of supervision and over-

and oversee their execution of duties from an impartial and fairsight over the executive officers to ensure overall soundness

standpoint taking the shareholders’ perspective into account.

and transparency of management.

Directors

Executive Officers

Takeo Shiina*

Executive Advisor of IBM Japan, Ltd.

Hiroshi Suzuki

President & CEO

Yuzaburo Mogi*

Representative Director, Chairman & CEO of­Kikkoman Corporation

Hiroshi Hamada

Executive Officer & COO

Kenji Ema

Executive Officer & CFO

Former Special Advisor of Recruit Co., Ltd.

Hiroaki Tanji

Executive Officer, Planning

Taro Hagiwara

Executive Officer, Technology

Eiko Kono*

Yukiharu Kodama* President of the Mechanical Social Systems Foundation
Itaru Koeda*

Executive Advisor, Honorary Chairman of Nissan
Motor Co., Ltd.

Hiroshi Suzuki
Hiroshi Hamada*Outside directors

Kenji Ema

(As of June 16, 2009)24 HOYA Annual Report 2009

• Nomination Committee

director includes a fixed salary, results-based remuneration and

The Nomination Committee decides on the selection of candi-stock options. Each package is decided based on consideration

dates for appointment as directors and executive officers inof such factors as prevailing business conditions, financial

accordance with selection standards, and submits nominations

results and standards adopted by other companies.

to the Board of Directors for approval. The committee also creates standards, based on which it evaluates the execution of• Audit Committee

duties by executive officers and reports the results to the Com-

The Audit Committee formulates the audit policy and audit

pensation Committee. When necessary, the Nomination Com-

plans for each fiscal year, and receives the interim and final

mittee refers proposals to relieve directors of their posts to thereports from the certified public accountants to verify the finan-

General Meeting of Shareholders, and refers proposals to relieve

cial statements. In addition, it conducts hearings of the results ofexecutive officers of their posts to the Board of Directors.

operational audits carried out by the Audit Department, verifying the soundness, lawfulness and efficiency of the Company’s• Compensation Committee

operations. All items of significant interest are reported to the

The Compensation Committee prepares the remuneration

Board of Directors, and action is taken as needed.

system that incentivizes directors and executive officers. It wasestablished with the objective of contributing to improved

Internal Control Systemfinancial performance for Hoya, by undertaking fair and accu-

In addition to striving to further strengthen corporate gover-rate evaluations of results. The remuneration package for eachnance, the Hoya Group also works toward the development ofCorporate Governance Structure
General Meeting of Shareholders
Election

Board of Directors

ElectionInternal directors: 3 (serving concurrently as executive officers)
Outside directors: 5
Impartial judgement(ensure transparency)

Election

The Three Committees
Nomination Committee
Secretariat

President
Executive Officers

Supervision
and advice
Execution ofoperations

Nomination Committee: 5 outside directors
Collaboration

Compensation Committee
Secretariat

Executive Officers

DivisionsCompensation Committee: 5 outside directors
Collaboration

Audit Committee Secretariat

Audit Committee: 5 outside directors

HOYA Annual Report 200925

Corporate GovernanceTransparent Governancesound internal control systems with the objective of ensuringsystem for the Group. If there is an act that contravenes the law

appropriate and efficient business management.

or the Hoya Business Conduct Guidelines, the Hoya Help Line isEach business division and facility develops and improves

intended to enable early discovery of the contravention andthe control environment, evaluates and responds to risk, andquick reporting to top management, enabling timely andverifies and improves control processes to ensure that the con-appropriate action to be taken on the issue. This structure helps

trol systems that operate within each division and facility are theto preserve the integrity of the Hoya Group as a whole. The

most appropriate for their operating environment.

Hoya Help Line is a dedicated system located within the Com-

The head of each business division has managerial authority

pany’s headquarters for internal use, and it can also be used as

and is responsible for improving business results. Each head isa point of contact with external legal counsel who is available toalso obligated to seek to further improve internal control sys-

listen to employees. This separation preserves anonymity andtems, with the objectives of maintaining compliance, the effec-

works to maintain the system’s functional effectiveness. As oftiveness and efficiency of work practices, the reliability ofthe end of March 2009, the system had been introduced atfinancial reporting and the integrity of management assets.

Group companies in Japan, North America (the United States

The Audit Department at Hoya Group Headquarters is

and Canada), Thailand and Europe. It is scheduled to be intro-

responsible for the regular auditing and verification of adminis-

duced in the Philippines in June 2009. The intention is to con-trative processes for each division and business office from antinue to expand the number of countries covered, giving theindependent standpoint. It conducts operational audits, checks

Hoya Help Line worldwide coverage.

that internal control systems are functioning as they should,
ensures that there is no dishonesty, and checks for areas for• Internal Control Reporting System

potential improvement. Problems that come to light as a result

Hoya has completed the creation of a system for visualizing theof audit procedures become the subject of a recommendation

status of internal controls over financial reporting for thefor improvement. Particularly important matters are reported toGroup’s key operating divisions. The Group has also created a

the Audit Committee and the Board of Directors, as well as toframework for evaluation of these controls. In the fiscal year

the executive officers. The executive officers decide upon andunder review, the Group will begin conducting verifications ofissue directives for speedy, appropriate responses.

the effectiveness of internal controls. Items that do not conformor for which internal controls are found to be inappropriate or• Hoya Business Conduct Guidelines

insufficient will be improved, and Hoya will continue its efforts

To achieve the best results from internal control systems, it isto ensure the reliability of financial reporting.

essential that all employees performing duties for an organization work to foster greater awareness. The Hoya Group has

Full Disclosure and Investor Relations Activities

established a set of Business Conduct Guidelines that clarify the

Hoya considers fair and prompt disclosure of information andguiding principles under which each employee should perform

other investor relations activities to be a fundamental duty of

his or her duties, with resolute adherence to professional ethics.

management. The Company also values communication withThe Group also conducts a wide range of employee education

shareholders, and it continues to clearly reflect their views in its

activities to foster awareness of regulations and rules.

management practices.

• Hoya Help Linestatements, ahead of many other Japanese firms. Since then the

In 2003 the Company implemented another initiative, the Hoya

Company has sought to increase the timeliness and broaden theHelp Line (HHL), as an internal reporting and consultative

scope of disclosure by shortening the period between the

In 1998, Hoya began the disclosure of quarterly financial

26 HOYA Annual Report 2009

account settlement at the end of each quarter and the disclosure,individual investors since 2006. The seminars were well-and ensuring that the volume of information in the quarterly

attended by shareholders and investors in the fiscal year underreports is equivalent to that in the year-end financial reports.

review, offering a chance for the attendees to not only learn

Moreover, top management is actively involved in investor

more about Hoya, but also renew their awareness of the Com-

relations activities. For example, the CEO attends quarterlypany as it changes, while providing the Company with valuable

investor meetings to explain results and field questions for

feedback. Going forward, Hoya will strive to further improve its

securities analysts and institutional investors.

investor relations activities, aiming to achieve even better dia-

Furthermore, to enrich interaction with individual sharehold-logue with shareholders and investors.

ers and investors, Hoya has held seminars across Japan forComment From an Outside Director

Takeo Shiina
Outside Director, Chairperson of the Nomination Committee
Executive Advisor, IBM Japan, Ltd.

In 1995, when I was appointed an outside director at Hoya, it

of Japan: the Nomination Committee, the Compensation

was still rare in Japan for someone from outside a company toCommittee, and the Audit Committee. The role of an outside

be offered a directorship. I was invited to become the only

director is not, I believe, to ascertain the minute details of eachoutside director among Hoya’s eight directors at the time, nobusiness; rather, we draw on our rich experience as managers

doubt in part because I already had experience as an outside

and knowledge of different fields to ask executives to explain

corporate officer at a U.S. company. Roughly 14 years havetheir actions from a variety of perspectives and to offer ourpassed since that time, and over that period Hoya has madeopinions, creating a strong Board of Directors and a highly

dramatic progress in developing its corporate governancetransparent system of corporate governance.

systems. I consider the Company’s system to be highly reliable,

Hoya is currently at a turning point. Its operations are grow-and I am very glad to have had the opportunity to be part ofing and becoming increasingly global, while it expands its busi-

Hoya’s history as an outside director.

ness domains through the merger with Pentax. As the

Today, five of Hoya’s eight directors are outside directors, andchairperson of the Nomination Committee, I am making every

under their supervision and oversight I believe the Company iseffort to enhance the management team so that it can respondconducting highly transparent and efficient management.

to the major changes in the Group’s environment, while at theAs outside directors, we recognize the importance of ourrole in overseeing the work of executive officers. Each year wesame time helping to develop the next generation of executives.
As outside directors, we pose difficult questions to manage-

hold discussions to define the duties of each officer, set goals,

ment at Board of Directors’ meetings, standing in the share-evaluate results, and determine compensation based on actual

holders’ shoes. I hope that our shareholders will also attend theperformance through the three committees of the “company-

General Meeting of Shareholders to ask questions about man-with-committees” system as defined under the Companies Act

agement, and participate as full stakeholders in Hoya.

HOYA Annual Report 200927

Environmental Protection andOccupational Safety and Health Initiatives

Clear Corporate Social Responsibility
Environmental activities
Environmental Management System
Hoya’s environmental protection activities got underway in 1976 with the establishment of pollution countermeasure committees at each facility. In 1993, the Group drew up its Environmental Philosophy and aset of Fundamental Environmental Principles. The next step came in 1996 with the formulation of theGroup Environmental Management Regulation, on which Hoya’s environmental protection system isbased. The Conference of the Environmental Office, the most senior body of the system and responsible
for all environmental decisions, was headed up by the Company’s chief executive officer. However, in
October 2008 the Company merged its environmental protection and occupational safety and healthsystems, abolishing both the Environmental Management Regulation and the Conference of the Environmental Office. Environmental protection activities are now carried out under a new system headed up by
the Hoya Group Director for Environmental Protection, Occupational Safety and Health.

Examples of Activities Aimed at Reducing Environmental Impact and Risk
• Activities to Reduce Waste Disposal Volumes and Increase Waste Recycling(1) Reducing effluent volumes
Hoya has reduced effluent volume at the facility in Hachioji, Tokyo by separating the water from the effluent using an evaporation process and further reducing the flow of the recovered water by introducing a
volume reduction unit.
(2) Recycling plastic chip waste
In a section of the Thailand plant, the discharge methods and disposal contractors used for waste, primarily plastic chip waste, were revised based on methods used in Japan, enabling the recycling of waste that
Collecting tank for waste fluid
generated from lens cutting

previously had been disposed of as landfill as source of energy. In implementing these measures, theCompany took particular care to comply with laws and regulations and avoid any secondary pollution
impact from harmful substances. As a result, by the end of March 2009, the section of the Thailand plant
had increased its recycling of discharged waste by about 74%, and reduced its waste discharge, including
non-plastic waste, by approximately 27% compared to the previous year.
(3) Equipment for collecting intensively waste fluid generated from lens cutting
Hoya’s facility in Koka, Shiga Prefecture switched their method of collecting waste fluid generated fromthe lens polishing process from drum cans to a collection tank. Eliminating the need to transport thedrum cans also substantially reduced the risk of oil leakage.

A Secondary battery recycling box(4) Recycling portable rechargeable batteries
As a member of the Japan Portable Rechargeable Battery Recycling Center (JBRC), a cooperative forrecycling small rechargeable batteries, Hoya promotes battery recycling activities. The Company has
installed a recycling box at the Itabashi facility in Tokyo to recycle batteries.
(5) Collecting PET bottle caps
Hoya collects PET bottle caps at the facilities as part of their environmental activities. The collected caps
are sold to recyclers and the revenues put to use to send vaccines to children in developed countries
through a nonprofit organization (NPO).
A PET bottle cap recycling box

28 HOYA Annual Report 2009

• Steps Taken to Reduce Use of Chemical Substances
Hoya has replaced the silica gel used in packaging certain products for transport to maintain quality withanother desiccant. This decision was made in light of the EU’s REACH regulations, which specify thecobalt chloride used in silica gel as a substance of very high concern.
The facility in Hachioji, Tokyo voluntarily reduced the amount of isopropyl alcohol used in their product washing process. Japan’s Ministry of the Environment acknowledged these efforts to reduce VOCs
(volatile organic substances) with a certificate of commendation.

Certificate of commendation for
efforts to reduce VOCs

• Efforts to Reduce Environmental Impact of Operations on Surrounding Areas(1) Measures to reduce leakage
Previously, there was a risk that the hydrofluoric acid effluent used in production processes at the facility
in Akiruno, Tokyo could leak under unusual conditions due to the small capacity of the collection tank. In
response, Hoya increased its emergency preparedness by installing an additional, larger tank to ensurethat accidental leakage could be prevented even in extraordinary circumstances.
(2) Measures for tanks and distribution lines
To prevent the risk of leakage, Hoya has been proceeding with checking tanks and distribution lines
throughout its operations. In addition, the Company is replacing buried distribution lines with

Tank for collecting hydrofluoric acidwaste fluid­aboveground lines.
(3) Steps to improve and restore soil quality
Because the facility in Koka, Shiga Prefecture uses harmful substances, such as hydrofluoric acid, the Company has elected to conduct voluntary checks for soil contamination. Soil tests are now run on all groundother than under buildings. Results are analyzed to ensure that each indicator falls within allowed standards.
(4) Establishing inspection wells
As a result of the enforcement in August 2008 of a revised pollution prevention bylaw in Shiga Prefecture,
Hoya is now required to test and report on the quality of the ground water at all facilities in that prefecture that handle harmful substances.
Consequently, to enable us to obtain and measure samples of ground water, the Company built aninspection well at its Koka facility. Going forward, tests will be conducted annually, and the results
reported to the prefectural governor.
• Measures to Handle Asbestos Building Materials
Measures to handle asbestos building materials are one of the Group’s priorities. All sprayed asbestos

Inspection well for the collection andtesting of groundwater

had been either removed or effectively contained by March 2008. Non-sprayed asbestos building materials are also being gradually removed. At some facilities, the Company removed asbestos building materials used in the insulation material in roofs. When removing these materials, great care is taken to address
safety and health considerations, with producing and utilizing asbestos removal checklists.

Introduction of Environmental Management Systems (ISO 14001 Certification)
Since October 1996, Hoya has been introducing ISO 14001 environmental management systems both inJapan and overseas, with focus on production facilities. Group-wide, a total of 42 sites (13 domestic sites
and 29 overseas sites, as of March 31, 2009) were certified under ISO 14001 standards.

HOYA Annual Report 200929

Environmental Protection andOccupational Safety and Health Initiatives

Clear Corporate Social Responsibility

Occupational Safety and Health Initiatives
Occupational Safety and Health System
In 1995, the Hoya Group formulated its Occupational Safety and Health (OSH) Principles and Basic Policy,
under which the Group continued its OSH activities at its domestic facilities and began them at its overseas plants and facilities. The Hoya Group Environmental Protection and Occupational Safety and Healthmanagement system was set up to ensure the smooth and effective implementation of these activities.

Hoya Group Environmental and Occupational Safety and Health Organization
Chief Executive Officer (CEO)Hoya Group Director for Environmental Protection, Occupational Safety and HealthStrategic Business Units (Divisions)
The persons in charge of OSH for each Division
The persons in charge of Environmental Protection for each Division
Plants and facilities (including local subsidiaries)
The persons in charge of OSH for each Facility
The persons in charge of Environmental Protection for each Facility

Safety Activities• Establishing an Occupational Safety and Health Management System
To ensure the safety and health of its employees, Hoya has established an occupational safety and healthmanagement system based on the Occupational Health and Safety Assessment Series (OHSAS) 18001
standards. As of March 31, 2009, nine facilities in Japan and 29 facilities in 17 countries overseas havebeen certified under OHSAS 18001, a process that began in March 2002.
Training on introduction of machinery
safety standards• Measures to Ensure Machinery and Equipment Safety
In April 2005, with the aim of preventing accidents related to operating machinery and equipment, the
Hoya Group Machinery Safety Standard was issued. Within the field of occupational safety measures,
Hoya is prioritizing implementation of risk reduction measures for machinery and equipment right fromthe design stage.
• Implementing OSH (Occupational Safety and Health) Audits

An OSH audit underway

To improve and enhance the performance of occupational safety and health systems, audits are conducted on a regular basis at facilities in Japan and overseas by a director and staff of the Hoya Group
Environmental Protection and OSH.
• Promoting OSH Activities by Global Staff
In order to promote sharing of information, education, and communication, Hoya periodically holds OSH
staff meetings.

Hands-on safety training at an OSH
Asia Meeting

30 HOYA Annual Report 2009In June 2008, Hoya held the 3rd OSH Asia Meeting in Tokyo. About 50 participants attended the meeting, from 23 facilities in Japan and overseas. During the meeting, which ran for three days, participants
reaffirmed Hoya’s safety policies, studied assessment methods for chemical substances, visited a local production base, and attended hands-on safety training seminars taught by outside educational institutions.
For the future, through cooperation with subsidiaries in Asia, Europe, North America, and otherregions, Hoya is planning to further strengthen its OSH management system and to enhance the performance of occupational safety and health.

Health Promotion Activities• Mental Health Measures
With the help of industrial doctors, Hoya has implemented measures to raise mental health awarenessthrough mental health courses for managers and supervisors and for regular employees. Based on the Hoya
Group Mental Health Measures Guidelines, the Company has also established a system to ensure thoroughcare by managers and supervisors with the support of staff in charge of personnel and industrial doctors.
• Measures to Prevent Excessive Work
In compliance with the 2006 revision of the Industrial Safety and Health Act, Hoya has created and implemented excessive working hours standards. Employees who exceed these standards meet with physicians(industrial doctors) and address the problem through work management (overseen by a personnel officer
or other on-site supervisor) and healthcare management (industrial doctors) programs.
• Special Health Checkups and Healthcare Instruction
Since 2002, Hoya has run a lifestyle habits improvement program for employees designed to prevent metabolic syndrome. In the fiscal year under review, the Company held special health educational seminars andlifestyle habits improvement programs to prevent metabolic syndrome for approximately 360 employees.
• Healthcare Management for Employees Assigned Overseas
To provide healthcare management for employees assigned overseas, industrial doctors meet with
employees and their families before they leave Japan to provide hygiene education and discuss healthcare while they are overseas. In addition, industrial doctors pay periodic visits to facilities and to discuss
health care and other issues as necessary with employees located overseas.
• Measures for New Influenza Strain
Since April 2009, Hoya implemented measures to deal with the epidemic of the new strain of influenzathat spread to the world. Based on its existing manual for infectious diseases crises and led by the Influenza Infection Crisis Management Team, Hoya has responded to the raising of the WHO alert level byimplementing general anti-infection measures (such as hand-washing, gargling, and use of alcohol disinfectants), measures to limit the travel by employees and their families, and to establish business continuity
planning (BCP).

HOYA Annual Report 200931

R&D Activities/Intellectual Property Activities

Forward Looking Research & Development
R&D Activities
Aiming to achieve sustainable growth and increase corporate value, the Hoya Group devotes
R&D Expenses

considerable effort to formulating business strategy from a long-term perspective and devel-(Millions of Yen)

(%)

25,000

5
4
3

20,0002
1

15,000

0oping technology, as well as acquiring and cultivating new businesses. The R&D Center conducts various R&D with an eye on the future. It conducts R&D in new business fields, develops
technologies and products that enhance the competitiveness of existing businesses, andsupports development on technology themes common to more than one business division.
In March 2008, Hoya merged with Pentax, in the process adding a new business domain:

10,000Pentax’s precision devices, such as medical-use endoscopes and digital cameras, which the

5,000

company has built up over the years. In addition to Hoya’s traditional electro-optics, the

0

2005

2006

2007

2008

2009

n R&D Expenses (left)
Ratio of R&D expenses to sales (right)

Group is investing substantial management resources in the promising medical and healthcare field, aiming to use its advanced technological capabilities to achieve sustained growth
into the future. Here we present some of the R&D themes that Hoya is currently pursuing.
Nanoimprint Technology: Verifying Molds for Next-Generation HDDs
Hoya is putting its years of expertise in lithographic technologies to good use in the development of nanoimprint molds, which will be used to create the discrete track recording (DTR)
media for next-generation hard disk drives (HDDs). Eyeing 2010 as the date for practical application of DTR media, HDD manufacturers are working on commercializing products, with highhopes for using Hoya’s microfabrication technologies to achieve a track pitch of 50 nanometers.

Quartz nanoimprint mold for
DTR media

3C-SiC: Success with Prototype Devices
Hoya is promoting the development of 3C-SiC cubic monocrystal silicon carbide semiconductor wafers and devices, which are expected to offer superior energy efficiency. 3C-SiC can beused in automobiles and home appliances such as air conditioners to help combat global
warming. Taking volume production efficiency into account, Hoya is currently developing
six-inch wafers and testing and evaluating the power devices that will be the end product. The
Company is aiming for practical application in 2010.

3C-SiC wafers and devices

Connectors for Optical Communications: Completion of Ultra-Small FTTH Components
As the FTTH (Fiber to the Home) environment widens around the world, Hoya is working todevelop a GE-PON/G-PON*1-compliant module for converting optical signals to electricalones at optical communication access points. GE-PON/G-PON is the next-generation standard for high-speed optical communications, and is expected to become common from 2010
and beyond. By building a functional device on top of a wafer, Hoya is aiming to create products that are significantly smaller than existing products.
*1 GE-PON/G-PON (Gigabyte Passive Optical Network): A technology that enables high-speed transmission of 1 gigabyte per second over fiber optic lines and networks.

Connectors for optical communications

32 HOYA Annual Report 2009

Artificial Crystalline Lens Material: Recognition from the Japan Opthalmological Society

Injection (Gel)In the field of ophthalmology, Hoya is conducting R&D of artificial materials for use inside
crystalline lens capsules. Animal trials are already underway, and are yielding extremely positive results. This material offers the potential for vision correction, and in the future may havemedical applications that rival that of intraocular lenses.

Crystalline lens capsule

Gel

Artificial Crystalline Lens Material

Scanning Fiber Endoscope (SFE): Completion of Ultra-Small Diameter Endoscope Prototype
SFE is a new type of imaging device developed jointly by the University of Washington andPentax. An ultra-small diameter prototype endoscope created using this technology is currently under testing. SFE produces high-definition images that are equal to or better thanthose provided by charge-coupled devices used in current endoscopes, while achieving ahigh frame rate.*2 Using a narrow-band laser light source and image processing, the Company
is working to improve the ability to distinguish between normal areas and tumors, and in combination with various optical technologies, it is aiming for application in applied products withnew functionality.

Head of an ultra-small diameter
prototype SFE*2 Frame rate is a standard measure of frequency per time unit that an image is refreshed. Higher frame rates generatesmoother images.

Ultrasonic Bronchoscope: Commercialization in October 2008
Much like an electronic endoscope, bronchoscopes are equipped with a color CCD on one
end, allowing the medical professional to view the image on the screen as the device isinserted into the bronchial area. The convex array transducer enables ultrasound imaging
from the tracheal mucous membrane. In October 2008, Hoya launched sales of the world’s
first ultrasonic bronchoscope, EB-1970UK, for the European market. This product enables
physicians to view a precise optical image of the target area and then use the ultrasoundimage to confirm the affected area while making punctures. This new technology is expected
to be effective in the diagnosis and treatment of chest diseases such as lung cancer.

The EB-1970UK ultrasonicbronchoscope

Biocompatible Organic/Inorganic Composite Bone Prostheses: Proven Effective in Clinical Trials
When implanted in the human body, biocompatible organic/inorganic composite bone prostheses are absorbed through the same mechanism as normal bone metabolism to form newbone tissue because they have the same structure as natural human bone. These bone prostheses are garnering attention as a bone regeneration “scaffolding material” that is
approaching practical application in regenerative medicine. The prostheses show promise inapplications that unite them with stem cells and bone morphogenetic protein technologies.

The resilience of biocompatibleorganic/inorganic composite bone
prostheses

HOYA Annual Report 200933

R&D Activities/Intellectual Property Activities

Forward Looking Research & Development
Intellectual Property Activities
The Hoya Group’s intellectual property strategy protects proprietary technologies, and alongwith business strategies and R&D is a key management strategy for supporting Hoya’s continued growth. The 2008 merger with Pentax augmented the Group’s intellectual property, andwe intend to meld the existing intellectual property of the two corporations to create unprecedented value. From the perspective of patent portfolio management, the Company will work
to enhance its intellectual property rights in growth areas such as medical care and healthcare
going forward.

Intellectual Property Policy
One of the Hoya Group’s fundamental objectives is to make the fullest possible use of intellectual property to bolster the competitive strengths of its global businesses.
Obtaining Patent Rights
To ensure the most efficient possible patent prosecution for obtaining patent rights, technicaldevelopment managers and intellectual property managers work closely as a team. The Company aims to secure all necessary intellectual property rights from the initial stage of the development of leading-edge technologies, with an eye toward peripheral, applied and alternativetechnologies. In relation to those fields in which Hoya commands a leading position, the Company focuses on accelerating the process of securing patents in cutting-edge areas. At thesame time, in competitive markets, Hoya concentrates on promoting efficient patent prosecution while preventing infringement of the patents held by other companies. To achieve theseends, careful technical searches of patent information at other firms are performed, and theCompany supports the patent prosecution that is most appropriate for each field. Hoya is also
devoting itself to the formation of global patent networks that will be coordinated with the
moves of its production bases and trading partners into international markets.
Cross-Licensing and Out-Licensing
Hoya’s individual businesses are not large, but the Company strives to improve its competitiveness in each respective market. Hoya focuses on effectively and fully utilizing the patents thatare the cornerstone of the competitive position its businesses enjoy. This means there are cases
in which Hoya might assign licenses to third parties: for instance, where it is appropriate to sign
cross-licensing agreements granting mutual exercise of patent rights, or where the Company
can expect out-licensing of its patents to other companies to result in an expansion of the overall market, or when dictated by changes in Hoya’s competitiveness. This enables the Company
to pursue effective utilization of its intellectual property in line with its business strategy.
Prevention of Imitation and Infringement
Hoya maintains a constant watch on the market to ensure that its technologies are not imitated by third parties. When its technologies are imitated, the Company issues warnings and,
where necessary, takes appropriate steps such as filing for injunction. Hoya also respects patents held by others, affording them appropriate value and avoiding infringement, as part ofits efforts to streamline its patent management.

34 HOYA Annual Report 2009

Utilization of Third-Party Patents and Technologies
Hoya does not rely excessively on its own proprietary technologies and patents. If, after care-

Global Applications(By year of application)(Applications)

(%)

ful technical search and consideration of the available technologies, the Company finds that

1,000

50

third parties have superior technologies, patents or other advantages, and if it decides that

800

40

using them would be most efficient in commercializing a product, Hoya takes steps to seek

600

30

licenses to use third-party patents or introduce their technologies.

400

20

200

10

Systems Supporting Intellectual Property Activities
The Hoya Group is organized according to business divisions and companies, with extensive
delegation of authority from strategic business planning to decision-making. Each division has
an intellectual property group responsible for working in conformity with the respective strategies of their divisions—for instance, by filing patent applications and other rights-related man-

0

0

04.3

05.3

06.3

07.3

08.3

n	Applications filed by previous Hoya
Corporation (left)
n Pentax applications filed (left)
Global Applications (right)

agement activities, taking actions in relation to patents held by others and licensing out Hoya’s
own patents. Hoya’s global headquarters are under the management of the chief intellectual
property officer and are responsible for working to improve the intellectual property functionsof the Group. This includes such matters as establishing and promoting overall intellectual
property strategy, assisting business divisions in the establishment of patent strategies, thetraining and skill enhancement of employees, managing intellectual property assets, and thedevelopment of patent management systems. In particular, matters that necessitate decisionmaking for the Group—for example those requiring coordination of intellectual property issues
that run across more than one business division, or that involve bringing a case to court orreaching an amicable settlement—are deemed to require the approval of headquarters andare strictly managed under the direction of the CEO. Because intellectual property activities
are dispersed across all business divisions, there is a need to reduce any adverse effect frompotential difficulties in information sharing. At the same time, to improve synergies between
business divisions, the Company periodically holds joint intellectual property meetings for theexchange and sharing of information on each division’s intellectual property activities.

HOYA Annual Report 200935

R&D Activities/Intellectual Property Activities

Forward Looking Research & Development
Registered Patents andUtility Models(As of March 31, 2009)

Status of Intellectual Property
Number of Registered Patents and All Patent Applications Filed
During the year under review, Hoya registered 3,679 patents and utility models in Japan. The
main businesses of the electro-optics and vision care divisions accounted for 27% of these,
while Pentax’s cameras and medical-related devices accounted for 51%. Of the Company’s

Totalpatent applications, approximately 30% were lodged outside Japan during the year under

3,679

review. Moreover, as shown by this high percentage of global patent applications, Hoya ismaking the fullest possible use of intellectual property in line with its policy of increasing thecompetitive strengths of its global businesses.

n Electro-Optics Divisionn Photonics Divisionn Vision Care Divisionn Health Care Divisionn Pentax
n New-Business Relatedn Other

36 HOYA Annual Report 2009

661
26
339
59
2,523
70
1

Percentage of Patents Granted
The percentage of patents granted Group-wide in Japan (including those in the prior examination and review stages) was approximately 61.6% for the fiscal period ended March 31,
2008, the most recent year for which data available.

Financial and Corporate Data
38 Eleven-Year Summary of Consolidated
Financial Data
40 Management’s Discussion and Analysis
54 Consolidated Balance Sheets
56 Consolidated Statements of Income
57 Consolidated Statements of Changes
in Equity
59 Consolidated Statements of Cash Flows
61 Notes to Consolidated Financial Statements
85 Independent Auditors’ Report
86 Corporate Data
87 Timeline
88 Hoya Group Global Network
90 Investor Information

HOYA Annual Report 200937

Eleven-Year Summary of Consolidated Financial Data
(Fiscal Years Ended March 31)

1999

2000

2001

2002

Net sales (Millions of yen)

Hoya

201,290

201,110

236,802235,265Pentax

128,080

113,554

103,526

105,165

Operating income (Millions of yen)

Hoya

31,726

34,68845,12843,898

Pentax

9,897

736

(512)

1,481

Ordinary income (Millions of yen)

Hoya

33,61235,484

48,18445,774

Pentax8,316(3,203)

(626)

682

Net income (Millions of yen)

Hoya

17,837

20,716

21,86023,741Pentax6,410(12,144)(1,241)(5,034)Return on assets (ROA) (%)

7.8

8.9

8.6

8.7

Return on owners’ equity (ROE) (%)

11.6

12.4

11.8

11.5

Owners’ equity ratio (%)

71.7

73.2

73.0

78.8

Inventory turnover (Months)

3.2

3.3

3.1

3.2

Capital expenditures (Millions of yen)

13,654

17,77039,673

19,585

Depreciation, amortization and other (Millions of yen)*1

18,234

16,051

32,138

20,105

7.8

7.7

7.3

7.3

37.77

44.06

46.65

50.78

Research and development expenses (Billions of yen)
Per share data (after adjustment for stock split) (Yen) *2
Net income
Cash dividends

7.50

8.75

12.50

12.50

Cash flow*

77.65

79.15

116.2488.31

Owners’ equity*4

340.56376.55420.11471.55

Price earnings ratio (PER) (Times)

44.5

55.0

43.7

44.5

Price cash flow ratio (PCFR) (Times)

21.6

30.6

17.6

25.6

3

4.9

6.4

4.9

4.8

Stock price at year-end (Yen) (after adjustment for stock split)

1,680

2,425

2,040

2,260

Employees

9,414

10,651

12,966

13,311Price book value ratio (PBR) (Times)

Notes: 1.	Effective April 1, 2002, the Company adopted “Accounting Standard for Earnings per Share” (Statement No. 2 issued by the Accounting Standards Board of Japanon September 25, 2002) and “Guidance on Accounting Standard for Earnings per Share” (Guidance No. 4 issued by the Accounting Standards Board of Japan on
September 25, 2002). Net income per share and related data prior to that date are also calculated according to the standard for purposes of comparison.
2.	On December 9, 2005, the Accounting Standards Board of Japan (ASBJ) published a new accounting standard for presentation of equity, which is effective from thefiscal year ended March 31, 2007. Under this accounting standard, certain items which were previously presented as liabilities or assets are now presented as components of equity. Such items include stock subscription rights, minority interests and any deferred gain on derivative instruments. The Company now uses
“Owners’ equity” to replace the former “Shareholders’ equity,” which excludes such items as stock subscription rights and minority interests from Total equity.
3.	Owing to the inclusion in the scope of consolidation of Pentax Corporation and its subsidiaries on August 14, 2007, consolidated operating results for the fiscal year
ended March 31, 2008, include the operating results of Pentax Corporation and its subsidiaries for the second half of the fiscal year (from October 1, 2007, to March
31, 2008). For reference, only the most important components of operating results during previous fiscal periods (through the first half of the fiscal year ended
March 31, 2008) are shown individually for Pentax Corporation and its subsidiaries. Pentax Corporation was merged by absorption into Hoya Corporation on March
31, 2008.

38 HOYA Annual Report 2009

2003

2004

2005

2006

2007

2008
First Half

246,293

271,444

308,172

344,228

390,093108,189

134,493

133,558

142,211

157,344

52,983

68,16784,920101,096

107,213

3,970

6,937

3,586

2,985

5,653

50,87466,55489,525

103,638

102,909

3,639

5,375

3,396

3,260

5,067

20,03839,54964,13575,62083,391

687

3,089

3,526

805

3,570

7.3

14.0

20.0

21.2

9.0

17.8

25.8

81.7

75.5

2.9

2009

Fiscal Year481,631454,195——

95,07459,095——100,175

71,081——

81,725

25,110

—

—

20.6

14.4

3.9

27.1

25.9

21.6

6.9

79.1

77.3

81.6

56.7

56.7

2.8

2.7

2.7

2.8

3.0

3.5

15,94830,65940,17548,78654,432

39,46534,83919,792

25,32822,52027,48536,42745,45780,490

8.7

9.8

10.9

14.1

14.9

17.4

17.6

42.77

87.74

144.71

171.71

193.50189.01

58.01

85,689

3,337

2,820

586

12.50

25.00

37.50

60.00

65.00

65.00

65.00

82.72

174.91

171.65240.57229.23277.09210.17486.29491.90623.59648.87845.98903.49774.65

41.8

28.9

20.4

27.7

20.2

12.4

33.3

21.6

14.5

17.2

19.7

17.1

8.4

9.2

3.7

5.2

4.7

7.3

4.6

2.6

2.5

1,787

2,537

2,950

4,750

3,910

2,340

1,930

14,02318,092

21,23425,17628,45035,54534,592*1 Depreciation, amortization and other: Includes the loss on impairment of long-lived assets and amortization of goodwill.
*2 Per share data: Per share data has been retroactively adjusted to reflect a four-for-one split of common shares implemented on November 15, 2005.
*3 Cash flow per share: From fiscal 2002 and after, figures for cash flow per share are shown as cash flow from operating activities divided by the average number of issued
shares for the fiscal period. Figures prior to 2002 are calculated using simple cash flow calculated by adding depreciation and other factors to net income.
*4 The figures presented for “owners’ equity per share” for fiscal 2006 and earlier correspond to the figures previously presented as “shareholders’ equity per share.”

HOYA Annual Report 200939

Management’s Discussion and Analysis

Hoya Group and Scope of Consolidation

Business Integration with Pentax

The Hoya Group (the “Group”) consists of Hoya Corporation (theIn the first half of the previous fiscal year (fiscal year ended March 31,“Company”), 102 consolidated subsidiaries (6 in Japan and 96 overseas)2008), Hoya made a tender offer for the shares of Pentax Corporation,and 10 affiliates (5 in Japan and 5 overseas). Of the affiliates, 4 (2 inand as a result became the owner of a majority of Pentax’s shares,

Japan and 2 overseas) are accounted for by the equity method.

thereby bringing the company and its subsidiaries (hereafter “Pentax”

The Hoya Group is managed on a global, consolidated basis.

collectively) under the scope of consolidation from August 14, 2007.

Each of the Group’s business divisions and subsidiaries carries out

The income statement of Pentax was consolidated into Hoya’s income

their business strategies as formulated by the global headquarters atstatement from the second half of the previous fiscal year (the six-

Hoya Corporation, yet with their own management responsibility.

month period from October 1, 2007 to March 31, 2008). Subsequently,

Each region—North America, Europe and Asia, —has its own head-

Hoya merged with Pentax on March 31, 2008.

quarters, which focuses on enhancing relations with countries orregions of its operations, as well as supporting business promotion

Net Sales

activities. Hoya’s branch in the Netherlands is the financial headquar-

Consolidated net sales for the fiscal year ended March 31, 2009,ters for the Group.

amounted to ¥454,195 million, declining 5.7% year on year. By principal business segment, net sales in the Electro-Optics Division of the

Net Sales    Each Year ended March 31(Millions of Yen)

500,000
400,000
300,000
200,000
100,000
0

2005

2006

2007

2008

2009

308,172

344,228

390,093481,631454,195(Millions of Yen)

Net Sales

Sales by Business Segment    Each Year ended March 31
(%)
100

80
53.8

55.4

36.1

43.6

56.2

1.4

60
1.9
40
20
0

3.5

2.9

2.3

26.2

30.8

30.4

30.7

9.6

10.2
1.7

10.3
1.0

10.5
0.3

18.5

24.4
11.0
26.9

0.2

0.2

2005

2006

2007

2008

2009

n Electro-Optics

165,664

190,552

219,252

209,883

163,902n Photonics

10,74910,093

9,093

9,090

6,367

n Vision Care

94,971

104,457

119,808

126,338

110,725n Health Care

31,40935,48440,85046,17749,968———89,032

122,190

5,379

3,642

1,090

1,111

1,043

(Millions of Yen)n Pentaxn Other Businesses

40 HOYA Annual Report 2009

Information Technology business declined 21.9% year on year. Within

Hoya calculated the effect of exchange rates on operating results

the Eye Care business, net sales in the Vision Care Division were down

during the fiscal year under review by comparing the foreign currency-

12.4% year on year, while in the Health Care Division net sales rosedenominated financial statements of its overseas subsidiaries when

8.2% year on year. For the Pentax divisions, net sales dropped 30.1%,

converted into yen at the average exchange rates during the fiscal

compared with the previous fiscal year, including first-half results prioryear with the same statements when converted into yen at the aver-to consolidation.

age exchange rates during the previous fiscal year. In currency mar-

By customer region, net sales to customers in Japan decreased

kets during the fiscal year under review, the yen rose 11.6% against

9.6%, to ¥170,363 million, while net sales to overseas customers

the U.S. dollar, to ¥100.66, 11.7% against the euro, to ¥143.28, anddeclined 3.2%, to ¥283,832 million. As a result, the composition of net

19.5% against the Thai baht, to ¥2.94 compared with the previous

sales was 37.5% domestic and 62.5% overseas, meaning that overseas

year. As a result of the yen’s appreciation against these currencies, thenet sales accounted for an even higher proportion of total net sales

operating results of Group companies in major overseas regions werethan in the previous fiscal year.

lower than they would have been if converted using the previous fiscal
year’s rates. For the Group overall, exchange rates reduced net salesby ¥30,100 million and net income by ¥8,143 million.

Sales by Region (Based on the office location)    Each Year ended March 31
(%)
100

80
60

74.9

71.2

69.3

10.3

9.6

11.4

13.2

57.2

60.5

40

12.1

11.8
20

10.0

0

11.0
4.1

9.3

9.1

7.9

7.1

21.4

18.6

2005

2006

2007

2008

2009

n Japan

230,946244,998

270,373291,566

259,631n North America

30,77535,47137,456

56,68055,028n Europe

33,80339,232

51,33689,42097,144n Asia12,64824,52730,92843,96542,392(Millions of Yen)

Sales to Domestic and Foreign Customers (Based on the location of customers)    Each Year ended March 31
(%)
100

80

45.8

50.4

54.0

39.1

37.5

12.3

12.3

19.1

22.0

29.5

28.2

60
40
20

11.5

12.4

14.1

13.7

12.0

11.8

29.0

25.2

20.1
0

2005

2006

2007

2008

2009

n Japan

166,414173,506

178,547

188,520

170,363n North America

43,52042,673

44,95459,29455,915(Millions of Yen)n Europe

36,43041,20153,524

92,11699,800n Asia and other

61,80886,848113,068

141,701

128,117HOYA Annual Report 200941

Management’s Discussion and Analysis

Net Income

Ordinary income fell 29.0% year on year, to ¥71,081 million, due in

The cost of sales ratio rose in the fiscal year under review as sales

part to a loss on equity-method investment of ¥315 million with regard

prices declined, resulting in the gross profit margin falling 3.6 percent-to AvanStrate Inc. (formerly NH Techno Glass Corporation) as a result

age points, from 45.4% in the previous fiscal year, to 41.8%. Selling,of sluggish demand in the LCD panel industry. This was despite for-general and administrative expenses rose 5.8% to ¥130,811 million,

eign exchange gains of ¥7,152 million, despite the strong yen, thankswith the ratio of SG&A expenses to net sales rising 3.1 percentage

to Hoya’s efforts to efficiently manage funds globally through multiple

points, from 25.7% to 28.8%. As a result, operating income fell 37.8%,

foreign-currency denominations.
Net income was 69.3% lower year on year, at ¥25,110 million.

to ¥59,095 million, and the operating margin fell 6.7 percentage

Positive contributing factors were a ¥9,705 million gain on sales ofpoints, to 13.0%.
Major factors behind this decrease included lower profitability due

investment securities from the partial transfer of part of Hoya’s equity

to lower sales from major divisions. In addition, the Pentax digitalinterest in an equity-method affiliate and an extraordinary gain ofcamera business recorded an operating loss due to lower product¥3,200 million representing commission fees received for prior years

prices caused by a sudden and sharp drop in market demand andas a result of a review of a licensing contract. On the other hand, Hoya

escalating competition, resulting in operating costs that could not berecorded a ¥30,459 million asset impairment loss in each of the Pentax

absorbed and the amortization of goodwill associated with the man-divisions and others, a ¥6,743 million charge for additional retirement

agement integration.

benefits paid to employees in connection with business restructuring,Operating Income, Ordinary Income and Net Income    Each Year ended March 31(Millions of Yen)

120,000

90,00060,00030,000

0

2005

2006

2007

2008

2009

84,920101,096

107,213

95,07459,095n Ordinary Income

89,525

103,638

102,909

100,175

71,081n Net Income

64,13575,62083,391

81,725

25,110(Millions of Yen)n Operating Income

Profit Ratios    Each Year ended March 31

Profitability    Each Year ended March 31

(%)

(%)

40

30

30
20
20
10
10

0

0

2005

2006

2007

2008

2009

2005

2006

2007

2008

2009

Operating margin

27.6

29.4

27.5

19.7

13.0

ROE

25.8

27.1

25.9

21.6

6.9

Ordinary income ratio

29.1

30.1

26.4

20.8

15.6

Return on sales

20.8

22.0

21.4

17.0

5.5

 rdinary income/O
total assets

27.9

29.1

25.4

17.6

11.1

ROA

20.0

21.2

20.6

14.4

3.9

(%)

42 HOYA Annual Report 2009(%)

and a total of ¥2,328 million for the write-down of investment securi-internal reserves is to continue to actively appropriate resources forties due to share price declines.

marketing for consumer products, primarily in the medical field, while
also making timely investments in corporate mergers and acquisi-

Return on assets (ROA) was 3.9%, and return on owners’ equity

tions and R&D for future growth, as well as investing to ensure suf-(ROE) was 6.9%.

ficient production capacity and to develop next-generation

Dividends

technologies and new products.

Hoya determines dividends for each fiscal year by taking into account

Although business conditions in the fiscal year under review were

the Company’s performance and medium- and long-term capitalsevere, after balancing the need for internal reserves for future

requirements. It also tries to strike a balance between returning prof-

growth, Hoya paid an interim dividend of ¥30 per share and a year-

its to shareholders, employee welfare benefits, and supplementing

end dividend of ¥35 per share, for an aggregate dividend of ¥65 perinternal reserves to fund future growth. Hoya’s policy regarding

share for the full year, on a par with the previous fiscal year.

Stock Price Data    Each Year ended March 31(Times)

(Yen)

50

5,000

40

4,000

30

3,000

20

2,000

10

1,000
0

0

2005

2006

2007

2008

2009

Price earnings ratio

20.4

27.7

20.2

12.4

33.3

Price cash flow ratio

17.2

19.7

17.1

8.4

9.2

Price book value ratio

4.7

7.3

4.6

2.6

2.5

2,950

4,750

3,910

2,340

1,930

(Times) tock price at fiscal year-end
S(after adjustment for stock split) (Yen)Dividend per Share    Each Year ended March 31
(Yen)

80

60

40

20

0
(Yen)

n Period-end dividend

2005

2006

2007

2008

2009

22.50

30.00

35.00

35.00

35.00

n Interim dividend

15.00

30.00

30.00

30.00

30.00

Total dividend

37.50

60.00

65.00

65.00

65.00

Note: Dividends per share for the fiscal year ended March 31, 2006 and earlier have been retroactively adjusted to reflect a four-for-one split of common shares
implemented on November 15, 2005.

HOYA Annual Report 200943

Management’s Discussion and Analysis

Quarterly Financial Data
Quarterly Net Sales    Each Year ended March 31(Millions of Yen)

1Q

2Q

97,779100,980

3Q

4Q

1Q

2Q

147,055

135,816130,157

128,372

3Q

4Q

112,741

82,925

3Q

4Q

150,000
120,000
90,00060,00030,0000

2008(Millions of Yen)

Net Sales

2009

Quarterly Operating Income, Ordinary Income and Net Income    Each Year ended March 31
1Q

2Q

n Operating Income

22,640n Ordinary Income
n Net Income(Millions of Yen)

3Q

4Q

1Q

2Q

26,85027,52518,05921,85820,611

16,687–61

23,97628,12028,171

19,90822,47327,511

18,2772,820

17,09721,021

22,60321,004

21,198

19,136

12,610–27,834

3Q

4Q

1Q

2Q

3Q

4Q

–0.1

30,00020,00010,0000–10,000–20,000–30,000

2008(Millions of Yen)

2009

Quarterly Profit Ratios    Each Year ended March 31
(%)

1Q

2Q

40

20

0

–20

–40

2008

(%)

2009

Operating margin

23.2

26.6

18.7

13.3

16.8

16.1

14.8

Ordinary income ratio

24.5

27.8

19.2

14.7

17.3

21.5

16.2

3.4

Return on sales

17.5

20.8

15.4

15.5

16.3

14.9

11.2

–33.6

44 HOYA Annual Report 2009

Segment Information
Details of each segment and growth rate and profitability by business segment are as follows.

Business Categories for the Year Ended March 31, 2009
Business
Category

Information
Technology

Eye CareDivision

Products and Services

Electro-Optics

Photomasks and mask blanks for semiconductors, masks and devices for liquid-crystal displays(LCDs), glass disks for hard disk drives (HDDs), optical lenses, optical glasses, electronic
glasses, optical communication products, etc.

Photonics

Laser equipment, light sources for electronics industry, special optical glasses

Vision Care

Eyeglass lenses, eyeglass frames

Health Care

Contact lenses and accessories, intraocular lenses

PentaxEndoscopes, medical accessories, bone prosthesis, CHT Ceramic Hydroxyapatite, digital
cameras, interchangeable lenses, digital camera accessories and modules, micro lenses, CCTV
lensesOthersCrystal glass products; design of information systems, outsourcing, etc.

Sales and Operating Income by Segment
The Year Ended March 31, 2009

Information Technology

Eye CarePentaxOthersEliminations
or
Corporate Consolidated(Millions of Yen)

ElectroOptics

Photonics

Vision Care

Health Care

Sales to customers

163,902

6,367

110,725

49,968122,190

1,043

454,195—

Intersegment sales

274

583

11

—

13

4,073

4,954

(4,954)—

164,176

6,950

110,736

49,968122,203

5,116

459,149(4,954)454,195

39,712297

21,807

11,544(11,572)

235

62,023(2,928)59,095

Total sales
Operating income (loss)

Total

454,195

Sales Growth and Proﬁtability of Main Business Segments    Fiscal year ended March 31, 2009 (Compared with the previous fiscal year)
Sales Growth Ratio (%)

20

10

Health Care0–10

Consolidated Basis–20

Vision Care

–30

Electro-Optics
15

20

25

30

35
Operating Margin (%)

Notes:
1: The size of the circle represents the amount of operating income. Grey circles represent the previous fiscal year; blue circles represent the fiscal year under review.
2: Pentax has been omitted from this visual representation.

HOYA Annual Report 200945

Management’s Discussion and Analysis

Information Technology (Electro-Optics Division)

Segment operating income fell 41.1%, to ¥39,712 million. The
principal factors behind this decrease were a decline in orders amid aElectro-Optics Division    Each Year ended March 31

rising sense that the world economy was slowing, coupled with the(Millions of Yen)(%)

250,00050

impact of the strong yen and ongoing price declines.

200,00040

17.2% from the preceding term. These expenditures went toward up-

150,000

30

100,000

20

ing production of the Company’s HDD glass disk plant in Vietnam.

50,00010

Information Technology (Photonics Division)

Capital expenditures in this division came to ¥20,242 million, down

00front production-related investment involving next-generation­semiconductor-related miniaturization projects and investment in boost-

The Photonics Division manufactures and sells defect correction
equipment and laser oscillators used in highly precise processing,(Millions of Yen)

2007

2008

2009

n Net sales

219,252

209,883

163,902

which are used by manufacturers of semiconductors, LCD panels, andn Operating income

80,08567,46439,712

optical devices for producing flat panels and semiconductors. It also perating margin
O(%) Note

36.5

32.1

24.2

Assets258,746

210,007

186,864

Depreciation

27,44927,65327,430Capital expenditures

39,89924,431

20,242

manufactures and sells UV light source devices used to cure UV resinsin the bonding of optical parts, such as optical pickups and camera
modules. In addition, the division provides a wide range of specialty
glasses, including color filters for optical devices and electronic glass
for medical applications. During the fiscal year under review, a glass
polarizer was transferred from the R&D Center for the purpose of

In the Electro-Optics Division, net sales decreased 21.9%, to ¥163,902

full-fledged commercialization. Going forward, there are high expec-

million. In mask blanks for semiconductor production, sales fell amid

tations for growth in the optical communications field.

worsening business conditions in the semiconductor industry caused

During the fiscal year under review, sales of laser devices wereby the economic slump, with demand dropping precipitously as com-strong in the first half due to active capital expenditure by LCD panel

panies reduced development budgets and curbed capital expendi-

manufacturers. In the second half of the fiscal year, however, the eco-tures. In photomasks for semiconductors, although Hoya worked to

nomic downturn led to a slowdown in customers’ capital expendi-

provide high-quality, state-of-the-art mask products, sales fell year ontures, resulting in significantly lower orders for Hoya’s products.

year on account of deteriorating market conditions in the fourth quar-

Although specialty glass materials propped up results, net sales

ter. Downward price pressure on large-sized photomasks for LCDs

declined 30.0% to ¥6,367 million. Operating income dropped 64.0%

remained intense. In the first half of the year panel manufacturers,

to ¥297 million.

Hoya’s customers, relaxed their focus on volume production from theprevious year and introduced new products and products for development, resulting in firm sales. From the second half of the year, however, demand contracted suddenly as a result of increases in panel
inventories, and sales fell year on year accordingly. Sales of glass
memory disks for HDDs were affected significantly by the strong yen
and lower prices due to falling prices for HDDs, and in the fourth
quarter major inventory adjustments were seen in the market, leading
to a decline in sales. Sales of optical lenses also fell, as a worldwide
drop in demand for digital cameras during the second half of the
fiscal year caused a significant fall in orders for compact digital
camera lenses and lower market prices.

Note: The operating margin above is calculated using sales to customers plus intersegment sales. Please refer to details on page 45, Sales and Operating Income
by Segment.

46 HOYA Annual Report 2009

Eye Care (Vision Care Division)

Eye Care (Health Care Division)

Vision Care Division    Each Year ended March 31

Health Care Division    Each Year ended March 31(Millions of Yen)(%)

(Millions of Yen)(%)

150,000

20

50,00030

120,000

16

40,00024

90,00012

30,00018

60,0008

20,00012

30,0004

10,000

6

0

0

0

0

(Millions of Yen)

2007

2008

2009

(Millions of Yen)

2007

n Net sales

119,808

126,338

110,725n Net sales

40,85046,17749,968n Operating income

21,167

20,65321,807n Operating income

9,215

10,166

11,544

 perating margin
O(%) Note

17.7

16.3

19.7

22.6

22.0

23.1
26,609Assets perating margin (%)
O
Note

2008

2009

118,229

112,379

101,603

Assets24,41024,416

Depreciation

7,405

7,728

7,685

Depreciation

1,170

1,311

1,215

Capital expenditures

11,672

9,434

7,294

Capital expenditures

2,119

848

1,507

Sales in the Vision Care Division declined 12.4% year on year to

In the Health Care Division, sales rose 8.2% year on year, to ¥49,968¥110,725 million, mainly due to the strong yen. As the Japanesemillion. Eye City, our chain of directly managed contact lens specialty

market continued to contract due to falling prices, Hoya focused on

stores, drew more customers through consulting-based sales, andexpanding sales across its broad product lineup, ranging from pro-

expanded sales of high-value-added products. As a result, althoughgressive lenses to single-focus lenses and special coatings. Notwith-the total number of stores in Japan did not increase, existing storesstanding these efforts, sales declined 11.7% year on year. In the Northwon more new and repeat customers, leading to higher sales.

American market, financial uncertainty depressed consumer senti-

In intraocular lenses for use after cataract surgery, a new aspheri-ment, resulting in a 12.3% sales decline. In the European market,

cal product was introduced in Japan. In the European market, thecompetition from low-priced lenses grew more intense. In response,

division worked hard at selling ultra small incision-type products,

Hoya worked to expand sales of high-value-added lenses, primarily in

resulting in a year-on-year rise in sales. In September 2008, yellow

Western European countries, but sales nevertheless fell 6.5%. In Asia

lenses received U.S. Food and Drug Administration (FDA) approval,

and Oceania, although sales of single-focus and photochromic lenses

opening the door to entry into the U.S. market.

rose, slowing consumption resulted in a 12.3% decrease in sales.
Operating income for the Vision Care Division rose 5.6% over the

Operating income in the Health Care Division climbed 13.6% to¥11,544 million. The operating margin rose to 23.1%. The divisionprevious fiscal year, to ¥21,807 million, resulting in an operating

actively invested in marketing for further growth, as well as new prod-

margin of 19.7%. The division promoted sales of high-value-added

uct development, while continuing to reduce costs. These efforts paid

lenses and introduced new products in Japan and overseas, while

off in higher profitability.

working to enhance efficient production frameworks in Asia. As aresult of these efforts, profitability rose year on year. Capital expenditure for this division totaled ¥7,294 million, 22.7% lower than in theprevious fiscal year.

HOYA Annual Report 200947

Management’s Discussion and Analysis

PentaxIn the Lifecare business, the “i” series of megapixel-image-­capable endoscopes continued to enjoy strong sales growth in North

Pentax    Each Year ended March 31

America and Europe. In Japan, the series was launched in May 2008,(Millions of Yen)(%)

200,000

40

150,000

30

100,000

20

In the Imaging Systems business, the entry-level digital SLR

50,00010

PENTAX K-m was launched in October 2008, and the compact,00

and transnasal endoscope sales were strong. However, overseas sales,
which account for the majority of all sales, were affected by the yen’s
appreciation, resulting in a decrease in sales year on year.

water-proof digital camera PENTAX Optio W60 was brought to–50,000–10–100,000–20

market in June 2008. Despite promoting these unique products
incorporating Pentax’s technologies, stiff price-based competition
from other manufacturers and the strong value of the yen, as well as
lower demand caused by the economic downturn, led to a year-on-

2007

2008

2009

157,344

174,720

122,190—

89,032—n Operating income for the
12-month period

5,653

3,202

–11,572

Of which, operating income
for the 6-month period
following consolidation

—

–134

—

 perating margin for theO
12-month period

3.6

1.8

–9.5

Of which, operating margin
for the 6-month period
following consolidation

—

–0.2

—

Assets—

204,853

141,022competing products, Hoya implemented structural reforms. Notwith-

Depreciation——

13,246standing these reforms, with worldwide consumption slowing as a

Captal Expenditures

—

—

5,119

result of the economic crisis, further deterioration of results was(Millions of Yen)n Net sales for the
12-month period
Of which, net sales for the
6-month period following
consolidation

year decline in sales.
The Lifecare business contributed to profit; however, due to aslump in the Imaging Systems business and amortization of goodwill
recognized from the management integration, the Pentax division

Note:
Pentax was added to the scope of consolidation as of August 14, 2007. Performance for the 12 months prior to consolidation are shown in italic type forreference in comparing against past performance. Figures for the 12-month
period ended March 31, 2008 comprise the total of the six months prior toconsolidation and the six months following consolidation.

recorded an operating loss of ¥11,572 million.

Other
The Crystal Glass business was one of the Hoya Group’s major sales
growth drivers after 1945. However, this business peaked after thecollapse of the bubble economy in 1991, and sales have decreased
since. In order to deal with slow corporate demand and low-priced

expected. Therefore, as part of measures to strengthen the Group’s
operations and improve profitability, Hoya discontinued this businesson March 31, 2009.
Hoya’s Service business involves the construction and operation of IT systems for companies throughout the Hoya Group, as
well as outsourcing.

Sales in the Pentax divisions totaled ¥122,190 million. Pentax’s results
have been included in Hoya’s consolidated results since the second
half of the previous fiscal year (the six-month period from October 1,
2007 to March 31, 2008). For reference, sales decreased 30.1% compared with the whole of the previous fiscal year, including the six
months prior to consolidation.

48 HOYA Annual Report 2009

Results by Region

In Europe, there was a visible slowdown in growth in the retail

In Japan, sales fell in the Vision Care Division due to the market slow-

market, with contraction evident in certain countries. The Vision Caredown, but thanks to cost-reduction efforts the division saw higher

Division recorded declines in both sales and earnings amid the poor

earnings. The Electro-Optics Division, however, recorded decreases in

economic conditions and the strong yen, as did the Pentax Division,both sales and earnings because of falling unit prices for products andwhich was severely struck by exchange rates. Net sales in Europe

declining orders. As a result, net sales in Japan totaled ¥259,631

totaled ¥97,144 million and operating income came to ¥4,943 million,­million and operating income came to ¥7,371 million, representing a

representing higher revenues but lower earnings year on year.
In Asia, the Electro-Optics Division recorded higher sales due todecrease in both sales and earnings year on year.
In North America, consumer sentiment cooled amid rising uncer-

the relocation of manufacturing bases and other factors, but declining

tainty about the future of the economy due to financial uncertainty. The

product prices led to lower earnings. Meanwhile the Vision Care Divi-

Vision Care Division saw lower sales as a result of the appreciation of thesion saw both sales and earnings fall against the backdrop of theyen, but recorded higher earnings due to the benefits of cost reductions.

strong yen and economic slowdown, despite a strong effort in emerg-

In the Pentax digital camera business, however, lackluster performanceing economies such as China and India. As a result, net sales in Asia

resulted in a major drop in earnings. As a result, net sales in North

totaled ¥42,392 million and operating income came to ¥35,772 million,­America totaled ¥55,028 million and operating income came to ¥1,225

both lower year on year.

million, representing both lower sales and lower earnings year on year.

Sales Growth and Profitability by Geographical Segment    Fiscal year ended March 31, 2009 (Compared with the previous ﬁscal year)
Sales Growth Ratio (%)

90

60

30

Consolidated Basis
EuropeNorth America

0

Asia

Japan
–30
0

5

10

15

20

25

Operating Margin (%)

Note:• The size of the circle represents the amount of operating income. Grey circles represent the previous fiscal year; blue circles represent the fiscal year under review.
• Pre-consolidation data (six months ended September 30, 2007) on sales growth and profitability by geographical segment is not available for Pentax and istherefore not included in the calculations for this visual representation.

Group Employees by Region    Each Year ended March 31
(%)
100

14.2
80

6.2
8.5

11.1
5.3
8.0

10.1
4.8
8.5

14.5

14.5

5.7
8.0

5.2
7.7

75.6

76.6

71.8

72.6

60
40
71.1
20
0
(Person)Total
n Japann North America
n Europen Asia

2005

2006

2007

2008

2009

21,234
3,007
1,316
1,809
15,102

25,176
2,800
1,337
2,009
19,03028,450
2,861
1,380
2,429
21,78035,545
5,158
2,010
2,862
25,51534,592
5,014
1,797
2,660
25,121HOYA Annual Report 200949

Management’s Discussion and Analysis

Financial Position

Total interest-bearing debt, including short-term loans, long-term

Total assets as of March 31, 2009 stood at ¥591,096 million, a ¥98,347

debt with current maturities, commercial paper, other long-term debt,

million decrease compared with a year earlier.

and corporate bonds and other, amounted to ¥159,714 million, resulting in a 27.0% rate of leverage.

Current assets declined 6.3% year on year, to ¥384,466 million.
Cash and cash equivalents rose 14.7% from a year earlier, to ¥207,928

Total equity declined ¥56,616 million year on year, to ¥338,010

million, while notes and accounts receivable—trade decreased 31.2%

million due to declines of ¥5,779 million in retained earnings andto ¥82,875 million and inventories decreased 14.0%, to ¥71,258 million.

¥50,521 million in foreign currency translation adjustments. Owners’

Non-current assets decreased ¥72,541 million from the previous

equity, total equity less stock subscription rights and minority interests,

fiscal year-end to ¥206,630 million. This reflected a decrease due toimpairment losses on non-current assets of Pentax, as well as aamounted to ¥335,314 million, for an owners’ equity ratio of 56.7%.

of Japan due to the yen’s appreciation, and a decline in investment

Capital Expenditures/
Depreciation and Amortization

securities as a result of the partial sale of part of the Company’s equity

Capital expenditures during the fiscal year under review totaled

interest in equity-method affiliate AvanStrate Inc. (formerly NH Techno¥34,839 million, 11.7% less than in the previous fiscal year. Investment

Glass Corporation)in the Electro-Optics Division accounted for approximately 60% of thedecrease in the property, plant and equipment of subsidiaries outside

Total liabilities were down ¥41,732 million from the previous fiscal

total, with a focus on expanding and strengthening facilities for semi-

year-end, to ¥253,086 million. Although short-term loans payable

conductor-related miniaturization projects and glass disks for HDDs,

increased ¥31,534 million, notes and accounts payable—trade

which are seeing rapid gains in recording capacity.

decreased by ¥25,981 million, and income taxes payable decreasedby ¥23,520 million.

Total Assets, Owners’ Equity and Owners’ Equity Ratio    Each Year ended March 31(Millions of yen)(%)

800,000

80

600,000

60

400,000

40

200,000

20

0(Millions of yen)

0

2005

2006

2007

2008

2009

n Total assets

351,482

361,538

447,644689,444591,096n Owners’ equity

277,889

279,481365,102391,084

335,314

79.1

77.3

81.6

56.7

56.7

Owners’ equity ratio (%)

50 HOYA Annual Report 2009

Moreover, as shown in the lower graph, amortization of goodwill

Depreciation and amortization costs for the fiscal year underreview increased 11.5%, to ¥50,031 million. The Electro-Optics Divi-

and impairment losses are included in addition to the depreciation

sion accounted for just over 50% of this, at ¥27,430 million. In addition,

costs. For the fiscal year under review, each of the Pentax businessthe Pentax Division incurred depreciation of property, plant anddivisions and others applied impairment accounting, resulting in an

equipment, as well as amortization of goodwill that arose as a result of

impairment loss of ¥30,459 million.

the merger.

Interest-Bearing Debt    Each Year ended March 31(Millions of yen)(%)

160,000

40

120,000

30

80,00020

40,000

10

0

0
–10

–40,000(Millions of yen)

2005

2006

2007

2008

2009

n Short-term loans

194

—

—

6,465

2,145

n Long-term debt with current maturities

—

—

—

8,749

4,402

n Commercial paper

—

—

—

6,192

41,978n Long-term debt

—

—

—

13,2689,688

n Corporate bonds

—

—

—

99,967

99,972

Subtotal

194

—

—

134,641

158,185n Lease obligations

—

—

—

—

1,348

n Discounted promissory notes

—

—

—

1,551

181

Total

194

—

—

136,192

159,714

0.1

—

—

19.8

27.0

Leverage ratio (%)

Note: Corporate bonds were issued to fund a public tender offer to acquire Pentax Corporation. The balance as of March 31, 2009 is: Five-year bonds: ¥39,986
million Seven-year bonds: ¥24,992 million Ten-year bonds: ¥34,994 million

Capital Expenditures/Depreciation, Amortization and other    Each Year ended March 31(Millions of yen)

90,00060,00030,000

0

2005

2006

2007

2008

2009

n Capital Expenditures

40,17548,78654,432

39,46534,839n Depreciation, amortization and other

22,52027,48536,42745,45780,490(Millions of yen)

Note: Depreciation, amortization and other includes the loss on impairment of long-lived assets and amortization of goodwill.

HOYA Annual Report 200951

Management’s Discussion and Analysis

Cash Flows¥4,715 million) for property, plant and equipment, centered on invest-

Net cash provided by operating activities amounted to ¥90,977

ments related to next-generation products in the Electro-Optics Divi-­million, a decrease of ¥28,832 million from the previous fiscal year. The

sion, as well as the absence of the ¥72,463 million used in the previous

main positive factors were income before income taxes and minority

fiscal year to acquire Pentax’s shares.

interests of ¥44,059 million (down ¥50,494 million year on year), depre-

Net cash used in financing activities amounted to ¥5,801 million, aciation and amortization of ¥50,031 million (up ¥5,155 million), impair-difference of ¥74,054 million from the net cash provided by in thement loss of ¥30,459 million (up ¥29,877 million) and a decrease inprevious fiscal year. This was mainly due to a net increase of ¥31,466

notes and accounts receivable of ¥30,543 million (up ¥24,289 million).

million in short-term loans, and a total of ¥28,115 million in dividends

The main negative factors were a decrease in notes and accounts

paid (an increase of ¥39 million year on year), as well as the absence of

payable of ¥23,466 million (up ¥20,296 million) and ¥34,990 million in¥99,804 million from long-term bank loans and issuance of corporate

income taxes paid (up ¥10,030 million).

bonds for the tender offer for Pentax’s shares in the previous fiscal year.

Net cash used in investing activities amounted to ¥34,330 million,

As a result of the above, the balance of cash and cash equivalents asof March 31, 2009, was ¥207,928 million, an increase of ¥26,592 million.

a decrease of ¥78,707 million compared with the previous fiscal year.
This was primarily attributable to payments of ¥34,174 million (downNet Cash Provided by Operating Activities    Each Year ended March 31(Millions of yen)

120,000

90,00060,00030,000

0

2005

2006

2007

2008

2009

n Net income

64,13575,62083,391

81,725

25,110n Net cash provided byoperating activities

76,000105,855

98,793

119,809

90,977(Millions of yen)

Quarterly Net Cash Provided by Operating Activities    Each Year ended March 31
1Q

2Q

n Net income

17,097n Net cash provided byoperating activities

21,815(Millions of yen)

3Q

4Q

1Q

2Q

3Q

4Q

21,02022,60321,004

21,198

19,136

12,610–27,834

30,45032,59534,9482,883

41,80518,00628,28345,00030,00015,0000–15,000–30,000

2008(Millions of yen)

52 HOYA Annual Report 20092009

Business Risks

8. New Business

The main items believed to be potential risk factors for development of the

New business is important for future growth. In the event that no promising new

businesses of the Hoya Group are described below. Matters concerning forward-

business is developed, the growth of the Hoya Group might not be achieved as

looking activities included in these statements are based on information evaluatedplanned. In addition, the Hoya Group may carry out mergers and acquisitions as aby Hoya’s management as of the date these materials were prepared.

part of its business strategy. If unexpected obstacles emerge after such acquisition

1. Fluctuation of Exchange Rates

and unscheduled time and costs are required, the business results and financial

As the Hoya Group develops its business on a global scale, if the currencies ofcondition of the Hoya Group might be adversely affected.

those countries in which the Hoya Group has major manufacturing operations

9. Risk of Information Leakage

appreciate, export prices of its products would rise, which would incur an increase

In the course of its operations, the Hoya Group retains a substantial amount ofin costs on a consolidated basis. If the currencies of those countries in which thepersonal and confidential information, and the Group has numerous measures in

Hoya Group has major sales operations depreciate, it would bring about aplace to manage this information. Nevertheless, in the unlikely event that an

decrease in sales.

outflow of information were to occur, the Hoya Group could experience a loss of

2. Influence of International Situations

trust from society and face significant liability for damages.

In the event that the future movement of people, goods or money were to be

10. Intellectual Property Risk

extraordinarily restrained in certain regions, or if certain unexpected events took

In its new product development and manufacturing, as well as its sales activities, theplace in those countries in which the Hoya Group has business operations—

Hoya Group conducts thorough advance research to avoid infringing upon otherincluding changes in the political, economic or legal environments, labor short-companies’ intellectual property rights. Nevertheless, these efforts cannot eliminate

ages, strikes, accidents or natural calamities, etc.—certain problems may arise in

the risk of a third party asserting infringement of their intellectual property rights. In

the execution of business operations.

such an event, in addition to legal costs and depending on the outcome of litiga-

3. Business in Production Goods

tion, the Hoya Group might be unable to take advantage of said technology andEvery part of the Electro-Optics product range, which constitutes a major portion

could become liable for substantial damage compensation payments.

of Hoya Group revenue, involves intermediate production goods, components or

11. Product Quality Risk

materials. Therefore, growth of the business thereof is affected substantially by the

The Hoya Group manufactures a wide variety of products according to stringent

market conditions of such end-consumer products such as personal computers andquality standards. However, if a quality issue were to arise, necessitating a recall or

digital home appliances that are manufactured utilizing the resultant products.

resulting in product liability, in addition to the cost of collecting such products the

4. Emergence of Discounters and Lowering of Prices in
the Consumer Goods Sector

Group could incur significant damage to its reputation with customers. Also,

In recent years, discount shops of an unprecedented type have emerged anddepending on the product the Group could be liable for substantial damage compensation payments.

brought about a lowering of prices. If the influence of such discount shops swells

12. R isk Related to Human Resource Retention and Training

to an extent that cannot be absorbed by the Hoya Group’s cost reduction efforts

The ongoing growth of the Hoya Group is largely dependent on its ability to retainand strategies for adding high value both in Japan and abroad, the businessand train superior personnel in a wide range of fields. However, the Hoya Group’s

results and financial condition of the Hoya Group might be adversely affected.

growth and operating performance could be negatively affected if the swiftly

5. Competence for Developing New Products

diversifying employment environment resulted in a situation that halted the flow of

The Hoya Group strives at all times to develop state-of-the-art technologies.

capable human resources or impeded the recruiting and training of new personnel.

However, if the Hoya Group fails to sufficiently predict changes in the sector and

13. Risk Related to Procuring Raw Materials and Other Items

markets or to develop new products that meet customer needs in time, the busi-

Some of the raw materials and parts the Hoya Group uses in its manufacturing

ness results and financial condition of Hoya Group might be adversely affected.

activities are of a specialty nature, such that suppliers are limited, so the selection

6. Competitionof alternative suppliers would be problematic. Therefore, a natural calamity or

The Hoya Group, which has the top market share for its many products in theirrespective sectors, is constantly exposed to relentless competition. There is no
guarantee that the Hoya Group can maintain its overwhelming market share andcompete efficiently in future. If customers shift allegiance due to cost pressures orinefficiency of Hoya’s competitiveness, the business results and financial condition

accident on the part of a supplier could result in a sudden rise in purchase costs or
the inability to secure a stable supply of parts from suppliers. This situation could
cause the Hoya Group to delay product shipments or result in lost opportunities,
thereby having a negative effect on the Group’s operating performance andfinancial position.

of Hoya Group might be adversely affected.

14. Risk of Loss in Corporate Value from Hostile Takeover

7. Production Capacity

The Hoya Group believes that management’s responsibility is not to create

At present, the Hoya Group reinforces its production capacity so as to meet ordersthat exceed existing production capacity in multiple business areas. However, if thesetting up of such capacity were delayed for any reason, it would affect not only the
Hoya Group’s results but also the production and sales plans of its customers,
which might bring about increased market share for its competitors, etc., andadversely affect the business results and financial condition of the Hoya Group.

measures defending it against corporate acquirers. However, as the people
entrusted by shareholders management believes that it is important to achieve
future corporate growth, enhancing corporate value by raising the Group’s
operating performance and financial soundness. If a hostile takeover were tooccur nevertheless, the Hoya Group’s operating performance and financial
condition could be negatively affected.

HOYA Annual Report 200953

Consolidated Balance Sheets
HOYA Corporation and Subsidiaries
March 31, 2009 and 2008

Thousands of
U.S. Dollars(Note 1)Millions of Yen

ASSETS

2009

2008

2009

¥207,928¥181,336$2,116,748
843,681

CURRENT ASSETS
Cash and cash equivalents
Notes and accounts receivable   Trade (Note 12)82,875120,522   Other

1,971

2,726

20,069   Allowance for doubtful receivables(2,683)(2,388)(27,315)

71,25882,822

725,415

Inventories (Note 4)
Deferred tax assets (Note 9)

6,369

10,86864,835

Other current assets (Note 13)

16,74814,387

170,499

384,466

410,273

3,913,932    Total current assets

PROPERTY, PLANT AND EQUIPMENT (Note 5)Land

15,756

16,888160,395

Buildings and structures

79,814

77,598812,5232,450,321

Machinery and vehicles

240,695

250,705

Furniture and equipment

42,29235,302

430,544

Construction in progress

12,95910,212

131,930    Total
Less—accumulated depreciation    Net property, plant and equipment

391,516

390,705

3,985,713(262,199)(238,502)(2,669,238)

129,317

152,203

1,316,475

INVESTMENTS AND OTHER ASSETS
Investment securities (Note 3)

3,550

4,924

36,143

Investments in non-consolidated subsidiaries and affiliated companies

7,778

17,27979,179Intangible (Note 5)

22,15056,305

225,492

Lease deposits

3,664

3,718

37,301

Deferred tax assets (Note 9)

36,643

41,159373,033

Other assets (Notes 5 and 13)

4,076

3,908

41,502

Allowance for doubtful receivables

(548)

(325)

(5,583)    Total investments and other assets

77,313

126,968

787,067¥591,096¥689,444$6,017,474

TOTAL ASSETS
See notes to consolidated financial statements.

54 HOYA Annual Report 2009

Thousands of
U.S. Dollars(Note 1)Millions of Yen

LIABILITIES AND EQUITY

2009

2008

2009

¥ 29,558¥ 55,539$  300,900

17,14625,135

174,553

44,191

12,657449,871

CURRENT LIABILITIES
Notes and accounts payable   Trade   Construction and other
Short-term loans payable (Note 8)
Current portion of long-term debt (Note 8)

4,402

8,749

44,814

Income taxes payable (Note 9)

7,273

30,79374,041

Accrued bonuses to employees

4,754

7,453

48,399Accrued expenses

17,88422,515

182,066

Other current liabilities (Note 13)    Total current liabilities

5,781

6,015

58,849130,989

168,856

1,333,493

LONG-TERM LIABILITIESBonds (Note 8)

99,972

99,967

1,017,740

Long-term debt (Note 8)

10,96813,268111,653

Employees’ pension and retirement benefits (Note 6)

8,489

10,21086,417999

1,017

10,169Allowance for periodic repairs
Other long-term liabilities

1,669

1,500

16,997    Total long-term liabilities

122,097

125,962

1,242,976

TOTAL LIABILITIES

253,086

294,818

2,576,469

COMMITMENTS AND CONTINGENT LIABILITIES (Notes 10 and 12)
EQUITY (Note 7)
Common stock—authorized, 1,250,519,400 sharesissued, 435,017,020 shares in 2009 and 2008

6,264

6,264

63,771

Capital surplus

15,89915,899161,851

Stock subscription rights (Note 14)
Retained earnings

938

633

9,555

368,109373,888

3,747,416

(304)

(835)

(3,096)

Foreign currency translation adjustments(46,669)

3,852(475,103)

Treasury stock, at cost—2,160,060 shares in 2009
and 2,158,291 shares in 2008

(7,985)(7,984)(81,288)336,252

391,717

3,423,106

Net unrealized loss on available-for-sale securities, net of tax   Total

1,758

2,909

17,899TOTAL EQUITYMINORITY INTERESTS

338,010394,626

3,441,005

TOTAL LIABILITIES AND EQUITY¥591,096¥689,444$6,017,474

HOYA Annual Report 200955

Consolidated Statements of Income
HOYA Corporation and Subsidiaries
Years Ended March 31, 2009, 2008 and 2007

Thousands of
U.S. Dollars(Note 1)Millions of Yen

NET SALESCOST OF SALES (Notes 6, 10, 11 and 14)
Gross profit
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (Notes 6, 10, 11 and 14)
Operating income

2009

2008

2007

2009

¥454,195¥481,631¥390,093$4,623,790

264,289

262,944

197,4102,690,515

189,906

218,687

192,683

1,933,275

130,811

123,61385,4701,331,677

59,095

95,074

107,213

601,598

OTHER INCOME (EXPENSES):Interest and dividend income

4,081

4,596

2,922

41,543

Interest expense(2,348)(1,451)(87)(23,901)

Foreign exchange gains (losses)—net

7,152(5,447)(6,711)72,805Equity in earnings (losses) of associated companies

(315)

5,926

642

(3,207)

Loss on remediation of soil pollution and others(65)(1,612)

(767)

(658)

Loss on sales and disposal of property, plant and equipment(1,148)(1,125)(3,327)(11,684)

Loss on impairment of long-lived assets (Note 5)(30,459)

(581)

(88)

(310,075)

Additional retirement benefits paid to employees (Note 6)(68,645)(6,743)(1,921)(1,055)Gain on sales of property, plant and equipment

366

520

9,629

3,720

Gain on transfer of business

886

—

—

9,021

(2,328)(909)—(23,697)

Loss on write-down of investment securities
Gain on sales of investment securities

9,705

—

—

98,795

Received commission for prior years

3,200

—

—

32,577

2,980

1,483

(1,239)30,335   Other expenses—net(15,036)

(521)

(81)

(153,071)

INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS

44,05994,553

107,132

448,527

9,845

34,55023,492100,228

Other income (expense)—net

INCOME TAXES (Note 9)
Current

9,408(20,083)71

95,775

19,253

14,46723,563

196,003

304

1,639

(178)

3,100

¥25,110¥81,725¥83,391$  255,624

2009

2008

2007

¥58.01¥189.01¥193.50

Diluted net income

58.00

188.78

192.780.59

Cash dividends applicable to the year

65.00

65.00

65.00

0.66

Deferred   Total income taxes
MINORITY INTERESTS IN NET INCOME (LOSS) OFCONSOLIDATED SUBSIDIARIESNET INCOME

Yen

U.S. Dollars

2009

PER SHARE OF COMMON STOCK (Notes 2.q and 15)
Basic net income

See notes to consolidated financial statements.

56 HOYA Annual Report 2009$0.59

Consolidated Statements of Changes in Equity
HOYA Corporation and Subsidiaries
Years Ended March 31, 2009, 2008 and 2007

Millions of Yen

BALANCE, MARCH 31, 2006

Outstanding
Number of
Shares ofCommon Stock

CommonStockCapitalSurplusRetained
Earnings

Treasury
Stock,
at Cost430,615,413¥6,264¥15,899¥266,346¥(16,280)

Net income

83,391

Cash dividends, ¥60 per share(25,843)

Bonuses to directors

Net Unrealized
Gain (Loss)on Available
for Sale
Securities,
Net of Tax

Foreign
Currency
Translation
Adjustments

Stock
Subscription
RightsMinority
Interests¥110¥ 7,142¥ —¥ 920(64)

Repurchase of treasury stock(2,861)

Disposal of treasury stock

956,787(13)(1,607)

Changes attributed to accounting changes   in overseas consolidated subsidiaries

3,539

290

Net increase (decrease) in unrealized   gain (loss) on available-for-sale securities(196)

Net increase in foreign currency   translation adjustments

26,122

Net increase in subscription rights

167

Net increase in minority interests

956

Other increases
BALANCE, MARCH 31, 2007

2
431,569,339

6,264

15,899Net income

Disposal of treasury stock(12,752)(86)

33,264167(28,089)(3,407)(13)

1,292,797(2,261)

4,781

Net increase (decrease) in unrealized   gain (loss) on available-for-sale securities(749)

Net decrease in foreign currency   translation adjustments(29,412)Net increase in subscription rights

466

Net increase in minority interests
BALANCE, MARCH 31, 2008

1,033
432,858,729

6,264

15,899Adjustment of retained earnings due to   adoption of PITF No. 18

373,888(7,984)

(835)

3,852

633

2,909

(2,750)25,110Net income(28,136)

Cash dividends, ¥65 per share
Repurchase of treasury stock(3,141)

Disposal of treasury stock

1,372

(6)
(3)

5

Net increase (decrease) in unrealized   gain (loss) on available-for-sale securities

531

Net decrease in foreign currency   translation adjustments(50,521)305

Net increase in subscription rights(1,151)

Net decrease in minority interests
BALANCE, MARCH 31, 2009

1,876

81,725

Cash dividends, ¥65 per share
Repurchase of treasury stock

322,513432,856,960¥6,264¥15,899¥368,109¥ (7,985)¥(304)¥(46,669)¥938¥1,758

See notes to consolidated financial statements.

HOYA Annual Report 200957

Thousands of U.S. Dollars (Note 1)

BALANCE, MARCH 31, 2008

CommonStockCapitalSurplusRetained
Earnings

Treasury
Stock,
at Cost$63,771$161,851$3,806,249$(81,279)

Adjustment of retained earnings due to   adoption of PITF No. 18

Net Unrealized
Gain (Loss)on Available
for Sale
Securities,
Net of Tax

Foreign
Currency
Translation
Adjustments

Stock
Subscription
RightsMinority
Interests$(8,499) $ 39,211$6,440$29,615(27,996)

Net income

255,624

Cash dividends, $0.66 per share(286,428)(61)

Repurchase of treasury stock(33)

Disposal of treasury stock52

Net increase (decrease) in unrealized   gain (loss) on available-for-sale securities

5,403

Net increase in foreign currency   translation adjustments(514,314)
3,115

Net increase in subscription rights(11,716)

Net decrease in minority interests
BALANCE, MARCH 31, 2009
See notes to consolidated financial statements.

58 HOYA Annual Report 2009

$63,771$161,851$3,747,416$(81,288)$(3,096) $(475,103)$9,555$17,899

Consolidated Statements of Cash Flows
HOYA Corporation and Subsidiaries
Years Ended March 31, 2009, 2008 and 2007

Thousands of
U.S. Dollars(Note 1)Millions of Yen

2009

2008

2007

2009

¥ 44,059¥ 94,553¥107,132$  448,527   Depreciation and amortization

50,03144,87636,339509,324   Loss on impairment of long-lived assets

30,459582

88

310,075   Provision for (reversal of) allowance for doubtful receivables

587

557

(243)

5,975

   Provision for (reversal of) accrued bonuses to employees(2,716)

1,132

155

(27,653)

(18)

126

268

(187)

   Reversal of reserve for retirement benefit(1,722)——(17,527)   Interest and dividend income(4,081)(4,595)(2,922)(41,543)   Interest expense

2,348

1,451

87

23,901   Foreign exchange loss (gain)(8,032)(2,121)

4,783(81,768)   Equity in (earnings) losses of associated companies

315(5,926)

(642)

3,207

   Loss (gain) on sales of property, plant and equipment—net

180

(519)

(9,629)

1,829

OPERATING ACTIVITIESIncome before income taxes and minority interests
Adjustment for:   Provision for (reversal of) reserve for periodic repairs

603

1,125

3,327

6,135

(9,675)——(98,497)   Loss on write down of investment securities

2,328

872

7

23,697   Received commission for previous years(3,200)——(32,577)   Loss on disposal of property, plant and equipment   Gain on sales of Investment securities   Gain on transfer business

(886)

—

—

(9,021)   Additional retirement benefits paid to employees

6,743

1,921

1,055

68,645   Loss on remediation of soil pollution and others   Other—net

65

1,612

767

658

(423)

11,568

1,962(4,291)30,543

6,254(13,801)

310,937   Changes in assets and liabilities    Decrease (increase) in notes and accounts receivable    Decrease (increase) in inventories

6,240(7,163)(4,799)63,527    Decrease (increase) in other current assets(2,284)

1,039

2,250

(23,256)    Decrease in notes and accounts payable(23,466)(3,170)(1,208)(238,888)    Decrease in other current liabilities(1,020)

917

(781)

(10,383)   Interest and dividends-received

3,476

4,419

2,557

35,381   Interest—paid(1,897)(1,397)(41)(19,314)   Received commission for previous years—received

3,200

—

—

32,577   Additional retirement benefits paid to employees—paid(3,112)(2,797)(558)(31,679)   Loss on remediation of soil pollution and others—paid   Income taxes—paid   Refund of income taxes

(65)

(547)

(3,998)(658)(34,990)(24,960)(23,362)(356,207)

7,387

—

—

75,204     Total adjustments

46,91825,256(8,339)477,623     Net cash provided by operating activities

90,977

119,809

98,793926,150¥ 90,977¥119,809¥ 98,793$  926,150

FORWARD(Continued)

HOYA Annual Report 200959

Thousands of
U.S. Dollars(Note 1)Millions of Yen

FORWARD

2009

2008

2007

2009

¥ 90,977¥119,809¥ 98,793$  926,150¥ (7,108)¥¥$ (72,364)

INVESTING ACTIVITIESPayments for time deposit
Proceeds from refund of time deposit
Payments for property, plant and equipment
Proceeds from sales of property, plant and equipment

—

—

590

—

—

6,009

(34,174)(38,889)(52,379)(347,895)

1,170

1,216

10,218

11,912

(748)

—

(408)

(7,615)

Proceeds from sales of investment securities

17,87627

30

181,979

Payment for acquisition of shares of newly consolidated subsidiaries(1,154)(72,463)(908)(11,745)

Payments on merger to minority shareholders(9,398)——(95,670)

Payments for loans

(158)

(182)

(585)

(1,606)

Proceeds from collection of loans

236

102

78

2,404

(3,641)(3,225)(3,274)(37,067)

859

377

576

8,748

1,320

—

—

13,438(34,330)(113,037)(46,652)(349,472)

320,328

Payments for investment securities

Payments for purchases of other assets
Proceeds from other assets
Proceeds from transfer of business     Net cash used in investing activities
FINANCING ACTIVITIESNet increase (decrease) in short-term loans
Proceeds from long-term bank loans and issuance of corporate bonds
Repayments of long-term debt
Payments for purchases of treasury stock
Proceeds from sales of treasury stock
Dividends paid

31,466(3,882)—135

99,804—

1,375(8,979)(1,866)—(91,404)

(6)

(30)

(13)

(61)

3

2,518

1,934

29

(28,115)(28,076)(25,810)(286,218)

(305)

(215)

(2)

(3,102)     Net cash provided by (used in) financing activities(5,801)

68,253(23,891)(59,053)

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON CASH AND
CASH EQUIVALENTS(24,254)(14,311)

8,798(246,909)

Other

NET INCREASE IN CASH AND CASH EQUIVALENTS

26,59260,71437,048

270,716

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

181,336

120,62283,574

1,846,032

CASH AND CASH EQUIVALENTS, END OF YEAR

¥207,928¥181,336¥120,622$2,116,748

See notes to consolidated financial statements.

60 HOYA Annual Report 2009

Notes to Consolidated Financial Statements
Hoya Corporation and Subsidiaries

NO. 1

The excess of the cost of an acquisition over the fair value of

BASIS OF PRESENTING CONSOLIDATED

the net assets of the acquired subsidiary at the date of acquisi-

FINANCIAL STATEMENTS

tion is being amortized over a period of 20 years or less.

The accompanying consolidated financial statements have been

All significant intercompany balances and transactions have

prepared in accordance with the provisions set forth in the Japa-

been eliminated in consolidation. All material unrealized profit

nese Financial Instruments and Exchange Act and its related

included in assets resulting from transactions within the Groupaccounting regulations and in conformity with accounting prin-is eliminated.

ciples generally accepted in Japan (“Japanese GAAP”), which
are different in certain respects as to application and disclosureb. Unification of Accounting Policies Applied to Foreign

requirements of International Financial Reporting Standards.

Subsidiaries for the Consolidated Financial Statements—In May

In preparing these consolidated financial statements, certain

2006, the Accounting Standards Board of Japan (the “ASBJ”)

reclassifications and rearrangements have been made to theissued ASBJ Practical Issues Task Force (PITF) No. 18, “Practicalconsolidated financial statements issued domestically in order

Solution on Unification of Accounting Policies Applied to For-

to present them in a form which is more familiar to readers

eign Subsidiaries for the Consolidated Financial Statements”.

outside Japan. In addition, certain reclassifications have been

PITF No. 18 prescribes: (1) the accounting policies and proce-made in the 2008 and 2007 financial statements to conform todures applied to a parent company and its subsidiaries for simi-

the classifications used in 2009.

lar transactions and events under similar circumstances should in

The consolidated financial statements are stated inprinciple be unified for the preparation of the consolidated­Japanese yen, the currency of the country in which Hoya

financial statements, (2) financial statements prepared by foreign­Corporation (the “Company”) is incorporated and operates.

subsidiaries in accordance with either International Financial

The translations of Japanese yen amounts into U.S. dollar

Reporting Standards or the generally accepted accounting prin-amounts are included solely for the convenience of readers

ciples in the United States of America tentatively may be usedoutside Japan and have been made at the rate of ¥98.23 to $1,

for the consolidation process, (3) however, the following items

the rate of exchange at March 31, 2009. Such translations

should be adjusted in the consolidation process so that net

should not be construed as representations that the Japaneseincome is accounted for in accordance with Japanese GAAP

yen amounts could be converted into U.S. dollars at that or any

unless they are not material: 1) amortization of goodwill; 2)other rate.

scheduled amortization of actuarial gain or loss of pensions thathas been directly recorded in the equity; 3) expensing capital-

NO. 2

ized development costs of R&D; 4) cancellation of the fair value
model accounting for property, plant, and equipment and

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

investment properties and incorporation of the cost modela. Consolidation—The consolidated financial statements as ofaccounting; 5) recording the prior years’ effects of changes inMarch 31, 2009 include the accounts of the Company and its 102

accounting policies in the income statement where retrospective(100 in 2008 and 67 in 2007) subsidiaries (together, the “Group”).

adjustments to financial statements have been incorporated;

Under the control or influence concept, those companies inand 6) exclusion of minority interests from net income, if con-which the Company, directly or indirectly, is able to exercise

tained. PITF No. 18 was effective for fiscal years beginning on orcontrol over operations are fully consolidated, and those com-after April 1, 2008 with early adoption permitted.

panies over which the Group has the ability to exercise significant influence are accounted for by the equity method.
Investments in 4 ( 8 in 2008 and 1 in 2007) associated companies are accounted for by the equity method.
Investments in the remaining unconsolidated subsidiaries
and associated companies are stated at cost. If the equity

The Company applied this accounting standard effective
April 1, 2008. The effect of this change was not significant todecrease operating income, income before income taxes andminority interests. In addition, the Company adjusted the
beginning balance of retained earnings at April 1, 2008 as if thisaccounting standard had been retrospectively applied.

method of accounting was applied to the investments in thesecompanies, the effect on the accompanying consolidated financial statements would not have been material.

HOYA Annual Report 200961

c. Cash Equivalents—Cash equivalents are short-term invest-of consolidated foreign subsidiaries. The ranges of useful lives

ments that are readily convertible into cash, and are exposed toare from 10 to 50 years for buildings and structures and from 3

insignificant risk of changes in value. Cash equivalents include

to 12 years for machinery and vehicles.

time deposits, certificate of deposits, commercial paper andbond funds. Cash equivalents mature or become due withing. Impairment of Long-Lived Assets—The Group reviews its

three months of the date of acquisition.

long-lived assets for impairment whenever events or changes incircumstance indicate the carrying amount of an asset or asset

d. Inventories—Prior to April 1, 2008, inventories were stated atgroup may not be recoverable. An impairment loss is recog-

cost, determined by the average method. In July 2006, thenized if the carrying amount of an asset or asset group exceeds

Accounting Standards Board of Japan (ASBJ) issued ASBJ

the sum of the undiscounted future cash flows expected toStatement No. 9,” Accounting Standard for Measurement of

result from the continued use and eventual disposition of theInventories”, which was effective for fiscal years beginning on orasset or asset group. The impairment loss is measured as theafter April 1, 2008 with early adoption permitted. This standard

amount by which the carrying amount of the asset exceeds its

requires that inventories held for sale in the ordinary course ofrecoverable amount, which is the higher of the discounted cash

business be measured at the lower of cost or net selling value,

flows from the continued use and eventual disposition of thewhich is defined as the selling price less additional estimatedasset or the net selling price at disposition.

manufacturing costs and estimated direct selling expenses. The
replacement cost may be used in place of the net selling value,h. Intangible Assets—Intangible assets are carried at cost lessif appropriate. The Company applied the new accounting stan-

accumulated amortization, which is calculated by the straight-

dard for measurement of inventories effective April 1, 2008. Theline method. Amortization of software is calculated over 5 years.

effect of this change in accounting methods on profit or loss

Amortization of patent is calculated over 8 years. Amortizationand on business segment information was minimal.

of technological assets is calculated over 10 years. Goodwill isamortized on a straight-line basis over its estimated useful lifee. Investment Securities—All investment securities are classi-

determined for each investment, which does not exceed 20

fied as available-for-sale securities. Marketable available-for-saleyears. However, insignificant goodwill is charged to income

securities are reported at fair value, with unrealized gains andwhen incurred.

losses, net of applicable taxes, reported in a separate component of equity. The cost of securities sold is determined basedi. Accounting for Significant Allowances and Reserves—on the moving-average method.

i) Allowance for doubtful receivables: Allowance for doubtful

Non-marketable available-for-sale securities are stated atreceivables is provided at an amount determined based on

cost determined by the moving-average method. For otherthe historical experience of bad debts with respect to ordi-

than temporary declines in fair value, investment securities arenary receivables, plus an estimate of uncollectible amounts

reduced to net realizable value by a charge to income.

for receivables from companies in financial difficulty.
ii) Accrued bonuses to employees: Accrued bonuses to employ-f. Property, Plant and Equipment—Property, plant and equip-

ees are provided based on the estimated amount to be paid.

ment are stated at cost. Depreciation of property, plant andiii) Employees’ pension and retirement benefits: To prepare for

equipment of the Company and its consolidated domestic

retirement benefits payment to employees, an amountsubsidiaries is computed substantially by the declining-balance

deemed to have accrued at the end of the consolidated

method based on the estimated useful lives of the assets, while

fiscal year under review is provided as an allowance in certain

the straight-line method is applied to buildings acquired on ordivisions and overseas subsidiaries, based on estimatedafter April 1, 1998 by the Company and its consolidated domes-

amounts of retirement benefit obligations and pension

tic subsidiaries, and to almost all property, plant and equipment

assets at the end of the year. Past service costs are amortized

62 HOYA Annual Report 2009

on a straight-line basis over 10 years, which is less than therequires that all finance lease transactions be capitalized to

expected average remaining working lives of the employees.

recognize lease assets and lease obligations in the balance

Actuarial gains and losses are also amortized on a straight-

sheet. In addition, the revised accounting standard permitsline basis over 10 years, which is less than the expected aver-leases which existed at the transition date and do not transfer

age remaining working lives of the employees, commencing

ownership of the leased property to the lessee to continue towith the following fiscal year.

be accounted for as operating lease transactions.

(Changes in accounting policies)

The Company applied the revised accounting standard effec-

In July 2008, The Accounting Standards Board of Japan (ASBJ)

tive April 1, 2008. In addition, the Company continues to accountissued an Accounting Standard—ASBJ Statement No.19 “Par-for leases which existed at the transition date and do not transfer

tial Amendments to Accounting Standard for Retirement Ben-ownership of the leased property to the lessee as operating leaseefits (Part 3)”. The above accounting standards were therefore

transactions. The effect of this change in accounting methods on

applied from the fiscal year under review.

profit or loss and business segment information was minimal.

	  This had no effect on income before adjustment of income
taxes and other items for the fiscal year under review,l. Bonuses to Directors—Bonuses to directors are accrued atbecause its impact, including actuarial differences thatthe year end to which such bonuses are attributable.

accrued during the fiscal year under review, will be treated ascosts in and after the following fiscal year.
iv) Reserve for periodic repairs: Reserve for periodic repairs is

m. Income Taxes—The provision for income taxes is computed
based on the pretax income included in the consolidated state-provided at amount estimated based on the expenses of thements of income. The asset and liability approach is used tolatest extensive repairs for continuous melting furnaces.

recognize deferred tax assets and liabilities for the expectedv) Allowance for product warranties: To prepare for after-sales

future tax consequences of temporary differences between theservice expenses that are anticipated to arise within productcarrying amounts and the tax bases of assets and liabilities.

warranty periods, an allowance is provided on the basis ofDeferred taxes are measured by applying currently enacted tax

results for past fiscal years and forecasts for future warranty

laws to the temporary differences.

expenses. Some of the overseas subsidiaries primarily record
estimates based on their net sales.

n. Foreign Currency Translations—All short-term and long-termmonetary receivables and payables denominated in foreign

j. Research and Development Expenses—Research and devel-

currencies are translated into Japanese yen at the exchange

opment expenses are charged to income when incurred.

rates at the balance sheet date. The foreign exchange gains
and losses from translation are recognized in the statements of

k. Leases—In March 2007, the ASBJ issued ASBJ Statement No.

income to the extent that they are not hedged by forward

13, “Accounting Standard for Lease Transactions,” which

exchange contracts.

revised the previous accounting standard for lease transactions
issued in June 1993. The revised accounting standard for leaseo. Foreign Currency Financial Statements—The balance sheettransactions was effective for fiscal years beginning on or after

accounts of the consolidated overseas subsidiaries and associ-

April 1, 2008 with early adoption permitted for fiscal years

ated companies are translated into Japanese yen at the current

beginning on or after April 1, 2007.

exchange rates as of the balance sheet dates except for equity,

Under the previous accounting standard, finance leases thatwhich is translated at historical exchange rates. Differences

deemed to transfer ownership of the leased property to thearising from such translation are shown as “Foreign currency

lessee were capitalized. However, other finance leases weretranslation adjustments” in a separate component of equity.

accounted for as operating lease transactions if certain “as if

Revenue and expense accounts of consolidated overseas sub-capitalized” information was disclosed in the note to the les-sidiaries are translated into Japanese yen at the monthly aver-see’s financial statements. The revised accounting standard

age exchange rates.

HOYA Annual Report 200963

p. Derivatives and Hedging Activities—The Group uses deriva-

component of equity until exercised. The standard covers

tive financial instruments to manage its exposures to fluctua-

equity-­settled, share-based payment transactions, but does nottions in foreign currency exchange rates. Foreign exchange

cover cash-settled, share-based payment transactions. In addi-

forward contracts are utilized by the Group to reduce foreigntion, the standard allows unlisted companies to measure

currency exchange risks. The Group does not enter into deriva-

options at their intrinsic value if they cannot reliably estimate

tives for trading or speculative purposes.

fair value. The Company has applied this accounting standard

Derivative financial instruments and foreign currency trans-

for stock options to those granted on and after May 1, 2006.

actions are classified and accounted for as follows: (a) all derivatives are recognized as either assets or liabilities and measured

s. New Accounting Pronouncements

at fair value, and gains or losses on derivative transactions are

Business Combinations—On December 26, 2008, the ASBJ

recognized in the statements of income and (b) for derivatives

issued a revised accounting standard for business combina-

used for hedging purposes, if derivatives qualify for hedge

tions, ASBJ Statement No. 21, “Accounting Standard for Busi-

accounting because of high correlation and effectivenessness Combinations.” Major accounting changes under the

between the hedging instruments and the hedged items, gains

revised accounting standard are as follows;or losses on derivatives are deferred until maturity of the(1) The current accounting standard for business combinations

hedged transactions.

allows companies to apply the pooling of interests method of

There were no hedging instruments and hedged items as ofaccounting when certain specific criteria are met such that the

March 31, 2009. Hedging instruments and hedged items as ofbusiness combination is essentially regarded as a uniting-of-

March 31, 2008 were as follows:interests. The revised standard requires to account for such

Hedging instruments: Forward exchange contracts

business combination by the purchase method and the pooling

Hedged items: Loans payable denominated in foreign currency

of interests method of accounting is no longer allowed.
(2) The current accounting standard accounts for the researchq. Per Share Information—Basic net income per share is com-and development costs to be charged to income as incurred.

puted by dividing net income available to common sharehold-

Under the revised standard, in-process research and develop-

ers by the weighted-average number of common shares

ment (IPR&D) acquired in the business combination is capital-

outstanding for the period, retroactively adjusted for stockized as an intangible asset.

splits. Diluted net income per share reflects the potential dilu-(3) The current accounting standard accounts for a bargain pur-tion that could occur if the outstanding stock options werechase gain (negative goodwill) to be systematically amortized

exercised. Diluted net income per share of common stock

within 20 years. Under the revised standard, the acquirer recog-

assumes full exercise of the outstanding stock options at thenizes a bargain purchase gain in profit or loss on the acquisition

beginning of the year (or at the time of grant). Cash dividends

date after reassessing whether it has correctly identified all of

per share presented in the accompanying consolidated state-

the assets acquired and all of the liabilities assumed with aments of income are dividends applicable to the respective

review of such procedures used.

years including dividends to be paid after the end of the year.

This standard is applicable to business combinations undertaken on or after April 1, 2010 with early adoption permitted forr. Stock Option—In December 2005, the ASBJ issued ASBJ

fiscal years beginning on or after April 1, 2009.

Statement No. 8, “Accounting Standard for Stock Options” andrelated guidance. The new standard and guidance are appli-

Unification of Accounting Policies Applied to Foreign

cable to stock options newly granted on and after May 1, 2006.

­Associated Companies for the Equity Method—The current

This standard requires companies to recognize compensationaccounting standard requires unification of accounting policies

expense for employee stock options based on the fair value atwithin the consolidation group. However, the current guidance

the date of grant and over the vesting period as consideration

allows for applying the equity method to the financial state-

for receiving goods or services. The standard also requires com-ments of its foreign associated company which have been pre-panies to account for stock options granted to non-employees

pared in accordance with generally accepted accounting

based on the fair value of either the stock option or the goods

principles in their respective jurisdictions without unification ofor services received. In the balance sheet, the stock option is

accounting policies.

presented as a stock subscription right as a separate

64 HOYA Annual Report 2009

On December 26, 2008, the ASBJ issued ASBJ Statement No.

Asset Retirement Obligations—On March 31, 2008, the ASBJ

16 (Revised 2008), “Revised Accounting Standard for Equity

published a new accounting standard for asset retirement obli-

Method of Accounting for Investments.” The new standard

gations, ASBJ Statement No. 18 “Accounting Standard for Assetrequires adjustments to be made to conform the associate’s

Retirement Obligations” and ASBJ Guidance No. 21 “Guidance

accounting policies for similar transactions and events underon Accounting Standard for Asset Retirement Obligations.”

similar circumstances to those of the parent company when the

Under this accounting standard, an asset retirement obligation isassociate’s financial statements are used in applying the equity

defined as a legal obligation imposed either by law or contract

method unless it is impracticable to determine adjustments. In

that results from the acquisition, construction, development andaddition, financial statements prepared by foreign associatedthe normal operation of a tangible fixed asset and is associatedcompanies in accordance with either International Financial

with the retirement of such tangible fixed asset.

Reporting Standards or the generally accepted accounting prin-

The asset retirement obligation is recognized as the sum of

ciples in the United States tentatively may be used in applying

the discounted cash flows required for the future asset retire-the equity method if the following items are adjusted so that net

ment and is recorded in the period in which the obligation isincome is accounted for in accordance with Japanese GAAP,

incurred if a reasonable estimate can be made. If a reasonable

unless they are not material: 1) amortization of goodwill; 2)estimate of the asset retirement obligation cannot be made inscheduled amortization of actuarial gain or loss of pensions thatthe period the asset retirement obligation is incurred, the liabil-

has been directly recorded in the equity; 3) expensing capitalized

ity should be recognized when a reasonable estimate of asset

development costs of R&D; 4) cancellation of the fair value model

retirement obligation can be made. Upon initial recognition of aaccounting for property, plant, and equipment and investment

liability for an asset retirement obligation, an asset retirement

properties and incorporation of the cost model accounting; 5)cost is capitalized by increasing the carrying amount of therecording the prior years’ effects of changes in accounting poli-

related fixed asset by the amount of the liability. The asset

cies in the income statement where retrospective adjustments toretirement cost is subsequently allocated to expense throughthe financial statements have been incorporated; and 6) exclu-

depreciation over the remaining useful life of the asset. Oversion of minority interests from net income, if contained.

time, the liability is accreted to its present value each period.

This standard is applicable to equity method of accounting

Any subsequent revisions to the timing or the amount of thefor investments effective on or after April 1, 2010 with early adop-

original estimate of undiscounted cash flows are reflected as antion permitted for fiscal years beginning on or after April 1, 2009.

increase or a decrease in the carrying amount of the liability andthe capitalized amount of the related asset retirement cost. This
standard is effective for fiscal years beginning on or after April
1, 2010 with early adoption permitted for fiscal years beginningon or before March 31, 2010.

No. 3
INVESTMENT SECURITIESInvestment securities as of March 31, 2009 and 2008 consisted of the following:
Millions of Yen

Thousands of
U.S. Dollars

2009

2008

2009

Marketable equity securities¥2,050¥3,616$20,865

Non-marketable equity securities

1,500

1,308

15,278

Total¥3,550¥4,924$36,143HOYA Annual Report 200965

The carrying amounts and aggregate fair values of marketable equity securities and investment securities at March 31, 2009 and2008 were as follows:
Millions of Yen
Unrealized
Gains

Unrealized
LossesFair Value¥2,304—¥  254¥2,050

4,677

—

1,061

3,616

Cost

March 31, 2009
Available-for-sale—Equity securities
March 31, 2008
Available-for-sale—Equity securities

Thousands of U.S. Dollars
Cost

Unrealized
Gains

Unrealized
LossesFair Value—$2,586$20,865

March 31, 2009
Available-for-sale—Equity securities$23,451

Available-for-sale securities whose fair value was not readily determinable as of March 31, 2009 and 2008 were as follows:
Carrying AmountThousands of
U.S. Dollars

Millions of Yen

Equity securities
Investment to limited partnership and others
Total

2009

2008

2009

¥1,343¥1,060$13,676

157

248

1,602

¥1,500¥1,308$15,278

These were no sales of available-for-sale securities for the years ended March 31, 2009 and 2008.

No. 4
INVENTORIESInventories as of March 31, 2009 and 2008 consisted of the following:
Millions of Yen

Thousands of
U.S. Dollars

2009

2008

2009

Finished products and merchandise¥35,367¥39,080$360,037

Work in process

11,43518,737

116,407

Raw materials and supplies

24,45625,005248,971

Total¥71,258¥82,822$725,415

66 HOYA Annual Report 2009

No. 5IMPAIRMENT OF LONG-LIVED ASSETSThe Group reviewed its long-lived assets for impairment for the years ended March 31, 2009, 2008 and 2007 as follows:
2009
Use

Goodwill and other fixed assets for the PENTAX Division
Trademark rights of the PENTAX DivisionTokyo Studio in the Crystal Division
Assets to be sold, disposed and idle assets, etc.

Location

Itabashi-ku,
Tokyo, etc.
Boston (U.S.A.)
Akishima-shi, Tokyo
Mashiko-machi,
Tochigi, etc.

Type of assets

Millions of Yen

Thousands of
U.S. Dollars

Goodwill, etc.

¥27,436$279,304

TrademarkMachinery andvehicles, etc.
Buildings andstructures, etc.

213

2,172

68

683

2,742

27,916¥30,459$310,075

Total

The carrying amount of the goodwill and other fixed assets for the PENTAX Division was written down to the estimated recoverable amount, which was measured at its value in use. The discount rate used for computation of the present value of future cash
flows was 10%.
The carrying amount of the trademark rights of the PENTAX Division was written down to the estimated recoverable amount,which was measured at its value in use. The discount rate used for computation of the present value of future cash flows was 16%.
The carrying amount of Tokyo Studio in the Crystal Division was measured in terms of its value in use, which is considered to
be zero.
The carrying amount of the assets to be sold, disposed and idle assets was measured on the basis of their net sale price.
2008
Use

Location

Tokyo Studio in the Crystal Division

Akishima-shi, Tokyo

Rights in the Health Care Division
Assets for the surveying instrument business in the
PENTAX Division

San Diego (U.S.A.)
Ogawa-machi,
SaitamaMulleheimm(Germany), etc.

Idle assets, etc.

Type of assets

Buildings andstructures, etc.
Intangible assets
Buildings andstructures, etc.
Buildings andstructures, etc.

Total

Millions of Yen

¥129
212
149
91
¥581

The carrying amount of Tokyo Studio in the Crystal Division was written down to the estimated recoverable amount, which wasmeasured at its value in use. The discount rate used for computation of the present value of future cash flows was 5%.
The carrying amounts of the Rights in the Health Care Division were written down to the estimated recoverable amount, which
was measured at its value in use. The discount rate used for computation of the present value of future cash flows was 5%.
The carrying amount of Assets for the surveying instrument business in the PENTAX Division was written down to the estimatedrecoverable amount, which was measured at its value in use. The discount rate used for computation of the present value of future
cash flows was 5%.
The book value of idle assets was reduced to their estimated recoverable amount, which was measured on the basis of their net sale price.
2007
Use

Tokyo Studio in the Crystal Division
Total

Location

Type of assets

Akishima-shi, Tokyo

Buildings andstructures, etc.

Millions of Yen

¥88
¥88

The carrying amount of Tokyo Studio in the Crystal Division was written down to the estimated recoverable amount, which wasmeasured at its value in use. The discount rate used for computation of the present value of future cash flows was 5%.

HOYA Annual Report 200967No. 6EMPLOYEES’ SEVERANCE AND RETIREMENT BENEFITSThe Company and certain consolidated domestic subsidiaries have defined contribution benefit plan. Regarding the PENTAX division, which merged in 2008, it operated a fund-type corporate pension plan, an agreement type corporate pension plan and a termination allowance plan as defined-benefit pension plan.
Certain overseas subsidiaries operate defined-benefit pension plan or defined contribution benefit plan.
Employees’ severance and retirement benefits included in the liability section of the consolidated balance sheets as of March
31, 2009 and 2008.
Thousands of
U.S. Dollars

Millions of Yen
2009

2008

2009

Projected benefit obligation¥19,687¥20,899$200,414

Less fair value of plan assets(6,741)(8,848)(68,622)

Unrecognized actuarial differences(4,478)(1,865)(45,589)

21

24

214

¥ 8,489¥10,210$ 86,417

Prepaid pension cost
Employees’ severance and retirement benefits

Included in the consolidated statements of income for the years ended March 31, 2009, 2008 and 2007 are severance and retirement benefit expenses comprised of the following:Thousands of
U.S. Dollars

Millions of Yen
2009

2008

Service costs-benefits earned during the year¥  975¥1,0072007—$ 9,922

Interest cost on projected benefit obligation

367

192

—

3,739

Expected return on plan assets

(171)

(182)

—

(1,745)

Recognized actuarial loss

158

—

—

1,611

Additional retirement benefits

6,743

1,921

1,055

68,645

Others

1,581

1,805

—

16,097

Severance and retirement benefit expenses¥9,653¥4,743

1,055$98,269

2009

Assumptions used for the years ended March 31, 2009 and 2008 are set forth as follows:
2009

2008

Discount rate

Mainly 1.3%

Mainly 2.0%

Expected rate of return on plan assets

Mainly 2.0%

Mainly 3.5%

Mainly 10 years

Mainly 10 years

Mainly 10 years

Mainly 10 years

Amortization period of prior service cost
(Straight-line method)
Recognition period of actuarial gain (loss)(Straight-line method from the year ended March 31, 2009)

The estimated amount of all retirement benefits to be paid at the future retirement date is allocated equally to each service year
using the estimated number of total remaining service years.

68 HOYA Annual Report 2009

No. 7On May 28, 2009, the Board of directors resolved cash divi-

EQUITYdends amounting to ¥15,150 million ($154,230 thousand). Such

Since May 1, 2006, Japanese companies have been subject toappropriations have not been accrued in the consolidated

the Companies Act of Japan (the “Companies Act”). The sig-

financial statements as of March 31, 2009. Such appropriations

nificant provisions in the Companies Act that affect financial andare recognized when the Board of directors resolves them.

accounting matters are summarized below:(b) Increases/decreases and transfer of common stock,(a) Dividends

reserve and surplus

Under the Companies Act, companies can pay dividends at any

The Companies Act requires that an amount equal to 10% oftime during the fiscal year in addition to the year-end dividend

dividends must be appropriated as a legal reserve (a compo-

upon resolution at the shareholders meeting. For companies

nent of retained earnings) or as additional paid-in capital (athat meet certain criteria such as; (1) having the Board of Direc-

component of capital surplus) depending on the equity accounttors, (2) having independent auditors, (3) having the Board of

charged upon the payment of such dividends until the total of

Corporate Auditors, and (4) the term of service of the directors

aggregate amount of legal reserve and additional paid-in capi-

is prescribed as one year rather than two years of normal term

tal equals 25% of the common stock. Under the Companies Act,by its articles of incorporation, the Board of Directors may

the total amount of additional paid-in capital and legal reserve

declare dividends (except for dividends in kind) at any time

may be reversed without limitation. The Companies Act also

during the fiscal year if the company has prescribed so in its

provides that common stock, legal reserve, additional paid-in

articles of incorporation.

capital, other capital surplus and retained earnings can be

The Board of Directors of companies with board committees (The Nomination committee, Compensation committee

transferred among the accounts under certain conditions upon
resolution of the shareholders.

and Audit committee) can also do so because such companies
with board committees already, by nature, meet the above(c) Treasury stock and treasury stock subscription rights

criteria under the Companies Act, even though such compa-

The Companies Act also provides for companies to purchasenies have an audit committee instead of the Board of Corpo-

treasury stock and dispose of such treasury stock by resolution

rate Auditors. The Company is organized as a company withof the Board of Directors. The amount of treasury stock pur-board committees.

chased cannot exceed the amount available for distribution to

The Companies Act permits companies to distribute­dividends-in-kind (non-cash assets) to shareholders subject to acertain limitation and additional requirements.

the shareholders which is determined by specific formula.
Under the Companies Act, stock subscription rights, arepresented as a separate component of equity.

The Companies Act provides certain limitations on the

The Companies Act also provides that companies can pur-amounts available for dividends or the purchase of treasury

chase both treasury stock subscription rights and treasury stock.

stock. The limitation is defined as the amount available for dis-

Such treasury stock subscription rights are presented as a sepa-

tribution to the shareholders, but the amount of net assets afterrate component of equity or deducted directly from stock sub-dividends must be maintained at no less than ¥ 3 million.

scription rights.

HOYA Annual Report 200969

No. 8SHORT-TERM DEBT AND LONG-TERM DEBT
Short-term debt at March 31, 2009 and 2008 consisted of the following:Thousands of
U.S. Dollars

Millions of Yen
2009

2008

2009

Short-term loans and overdrafts, principally from banks, with interest rates ranging
from 1.88% to 7.00% (2009) and from 0.00% to 5.23% (2008)¥ 2,145¥ 6,465$ 21,834

Commercial paper with interest rates ranging
from 0.20% to 0.25% (2009) and from 0.78% to 0.82% (2008)

41,9786,192

427,346

68

—

691

¥44,191¥12,657$449,871

Lease debt—current
Total

Long-term debt at March 31, 2009 and 2008 consisted of the following:Thousands of
U.S. Dollars

Millions of Yen
2009

2008

2009

1.42%, unsecured straight bonds, payable in yen, due September 2012

¥ 39,986¥ 39,982$  407,067

1.62%, unsecured straight bonds, payable in yen, due September 2014

24,992

24,991

254,426

1.93%, unsecured straight bonds, payable in yen, due September 201734,99434,994356,247

99,972

99,967

1,017,740

14,09022,017

143,446

14,09022,017

143,446

1,280—

13,021

1,280—

13,021

115,342

121,984

1,174,207(4,402)(8,749)(44,814)¥110,940¥113,235$1,129,393

Bonds

Loans
Long-term loans and overdrafts, principally from banks, with interest rates ranging from
0.00% to 7.00% (2009) and 0.00% to 5.23% (2008)

Lease debt
Lease debt—non-current

Total
Less current portion included in current liabilities

Annual maturities of long-term bank loans as of March 31, 2009 and 2008 were as follows:
Thousands of
U.S. Dollars

Millions of Yen
Year Ending March 31

2009

2008

2009

2010

¥ 4,402¥   8,749$ 44,814

2011

4,213

4,607

42,895

2012

4,358

4,038

44,3672013

166

44,128

1,692
1,630

2014

160

6

Thereafter

791

60,456

8,048¥14,090¥121,984$143,446

Total

70 HOYA Annual Report 2009

No. 9INCOME TAXESThe Company and its consolidated domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory tax rate of approximately 40.4% for the years ended March 31, 2009, 2008 and 2007.
Significant components of deferred tax assets and liabilities as of March 31, 2009 and 2008 were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2009

2008

2009

   Inventories—loss on write-down¥ 5,734¥ 5,120$ 58,370   Accrued bonuses to employees

1,833

2,835

18,656   Additional retirement benefits paid to employees

1,310

—

13,339   Loss carry forwards

1,039

—

10,575   Inventories—intercompany unrealized profits

507

2,002

5,162

   Accrued enterprise taxes

284

1,592

2,886

Current:
Deferred tax assets:

—

601

—

   Other   Accrued loss on remediation of soil pollution and others

2,281

4,553

23,225   Less valuation allowance(1,864)(1,590)(18,971)    Total

11,124

15,113

113,242

Deferred tax liabilities:   Undistributed earnings of overseas subsidiaries and affiliated companies(2,482)(2,600)(25,267)   Other(2,273)(1,749)(23,140)    Total(4,755)(4,349)(48,407)¥ 6,369¥10,764$ 64,835   Loss carry forwards¥18,051¥20,161$183,767   Asset adjustment account

13,69920,012

139,459

Net deferred tax assets
Non-Current:
Deferred tax assets:   Loss on impairment of long-lived assets

3,707

531

37,738   Unrealized gain on investment securities

3,607

2,569

36,720   Amortization of goodwill and property, plant and equipment

1,851

1,017

18,842

548

131

5,581

   Allowance for doubtful receivables   Other

2,317

2,302

23,586   Less valuation allowance(6,345)(4,804)(64,597)    Total

37,43541,919381,096

Deferred tax liabilities:   Depreciation expense

(222)

(292)

(2,259)   Reserves for deferred income taxes on fixed assets

(171)

(198)

(1,746)   Reserves for special depreciation and other

(154)

(289)

(1,565)   Other

(245)

(166)

(2,493)    Total

(792)

(945)

(8,063)¥36,643¥40,974$373,033

Net deferred tax assets

HOYA Annual Report 200971

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying
consolidated statements of income for the years ended March 31, 2009, 2008 and 2007 was as follows:
2009

2008

2007

Normal effective statutory tax rate

40.4%

40.4%

40.4%

Loss on impairment and depreciation of goodwill

21.5

—

—

Adjustment of deferred tax assets

6.8

—

—

The amount influence of merging

—

(9.0)

—

Undistributed earnings of overseas subsidiaries

5.8

—

—

Change in valuation allowance

4.5

0.6

—

Lower or exemption income tax rates applicable to income in certain foreign countries(32.8)(20.1)(17.1)

Consolidated adjustment on unrealized gain in inventories

(1.8)

1.2

—

Other—net

(0.7)

2.2

(1.3)

Actual effective tax rate

43.7%

15.3%

22.0%

No. 10LEASESThe Group leases certain machinery, computer equipment, office space and other assets. Total rental expenses including lease
payments for the years ended March 31, 2009, 2008 and 2007 were ¥8,210 million ($83,576 thousand), ¥7,482 million and ¥3,909
million, respectively.
Pro forma information of leased property such as acquisition cost, accumulated depreciation, accumulated impairment loss,
obligation under finance lease, depreciation expense of finance lease that do not transfer ownership of the leased property to thelessee on an “as if capitalized” basis for the years ended March 31, 2009 and 2008 was as follows:
Millions of Yen

Thousands of U.S. Dollars
2008

2009
Furniture
Machineryandand Vehicles Equipment

Total

Furniture
Machineryandand Vehicles Equipment

2009

Total

Machinery Furniture andand Vehicles Equipment

Total

Acquisition cost

¥3,150¥434¥3,584¥5,282¥5,637¥10,919$32,064$4,422$36,486

Accumulated depreciation

1,973

266

2,239

3,156

4,048

7,204

20,084

2,706

22,790

Accumulated impairment loss

—

24

24

3

25

28

0

250

250

¥1,177¥144¥1,321¥2,123¥1,564¥ 3,687$11,980$1,466$13,446

Net leased property

The imputed interest expense portion as lessee is included in the above acquisition cost.
Obligation under finance leases
Millions of Yen

Thousands of
U.S. Dollars

2009

2008

2009

Due within one year¥  552¥2,039$ 5,615

Due after one year

778

1,662

7,922

¥1,330¥3,701$13,537

Total

Allowance for impairment loss on leased property of ¥9 million ($90 thousand) and ¥14 million as of March 31, 2009 and 2008 is
not included in obligations under finance leases.

72 HOYA Annual Report 2009

Depreciation expense and other information under finance leases:
Thousands of
U.S. Dollars

Millions of Yen
2008

2009

2007

2009

Depreciation expense¥600¥2,347¥718$6,109Lease payments

606

2,355

727

6,165

Reversal of allowance for impairment loss on leased property

6

8

9

56

Impairment loss

—

4

6

—

The imputed expense portion as lessee is included in the above obligation under finance leases.
Obligation under operating leases
Thousands of
U.S. Dollars

Millions of Yen
2008

2009

2009

Due within one year¥  860¥ 85$ 8,758

Due after one year

1,747

84

17,783

Total¥2,607¥169$26,541

No. 11RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses charged to income for the years ended March 31, 2009, 2008 and 2007 were ¥17,630 million($179,478 thousand), ¥17,413 million, ¥14,920 million, respectively.

No. 12
COMMITMENTS AND CONTINGENT LIABILITIESAt March 31, 2009 and 2008 the Group had the following contingent liabilities.
Thousands of
U.S. Dollars

Millions of Yen

Guarantees of borrowings and lease obligations for customers
Guarantees of borrowings for the Group’s employees
Trade notes discounted
Total

2009

2008

2009

¥1,720¥2,070$17,516

2

2

19

181

1,551

1,842

¥1,903¥3,623$19,377HOYA LENS DEUTSCHLAND GMBH (Germany), which is a subsidiary of the Company, received a statement of objections (the“statement”) from the Federal Cartel office of the Federal Republic of Germany in December 2008. The Company and HOYA LENSDEUTSCHLAND GMBH are currently investigating the facts of this matter, and will deal with it appropriately.
There is a possibility that losses will be incurred in the future related to the statement. However, it is difficult to reasonably estimate the impact when this report was prepared, so the effect on the consolidated financial statements is not clear.

HOYA Annual Report 200973No. 13
DERIVATIVES AND HEDGING ACTIVITIES
Derivatives and hedging activities as of March 31, 2009 and 2008 consisted of the following:
1. Conditions of transactions
The Group enters into derivative financial instruments (“derivatives”), including forward foreign exchange contracts and interest
rate swap contracts to hedge foreign exchange risk and interest rate exposures on certain assets and liabilities.
Foreign exchange forward contracts are utilized by the Group to reduce foreign currency exchange risks. The Group does notenter into derivatives for trade or speculative purposes.
(1) Hedge accounting methods
Deferral hedging is applied. Loans payable denominated in foreign currencies for which foreign exchange forward contracts areused to hedge the foreign currency fluctuations are translated at the contracted rate if the forward contracts qualify for hedge
accounting.
(2) Hedging methods and hedged items
Exchange risks are hedged based mainly on the Company’s ‘Internal Management Regulations’, and the Company has adopted apolicy of not conducting any speculative derivative trading.
Hedging method: Forward exchange contracts
Item hedged: Loans payable denominated in foreign currencies
There were no hedging instruments and hedged items as of March 31, 2009.
2. Fair value of transactions
Fair value of transactions as of March 31, 2009 was as follows:
Currency-related transactions:
Millions of Yen
Items

Contract
value

Contract over
one yearMarket value

Unrealized
gain (loss)¥   197¥¥   231¥ 34

Forward foreign exchange contracts
Buy—USD
EURO
Total

—

12,383

2,426

12,034(349)¥12,580¥2,426¥12,265¥(315)

Notes: 1. Market value:
		 Forward foreign exchange contract: Translated by forward exchange rates
2. Transactions which are translated at the contracted forward rates are excluded.

Interest rate swap:
Millions of Yen
Items

Contract
value

Contract over
one yearMarket value

Unrealized
gain (loss)

Interest rate swap
Receive floating pay fixed¥4,342¥4,342

¥(43)

¥(43)

Total

¥4,342¥4,342

¥(43)

¥(43)

Notes: 1. The principal amount regarding the interest rate swap is notional. The figures do not indicate market risks relating to the derivative transactions
2. Calculation of market value is based on the prices provided by the financial institutions the Company entered into the interest rate swap contracts with.

74 HOYA Annual Report 2009

Currency-related transactions:Thousands of U.S. Dollars
Items

Contract
value

Contract over
one yearMarket value

Unrealized
gain (loss)$   2,000$$   2,351$ 351

Forward foreign exchange contracts
Buy—USDEURO—

126,066

24,695

122,510(3,556)$128,066$24,695$124,861$(3,205)

Contract
value

Contract over
one yearMarket value

Receive floating pay fixed$44,197$44,197$(442)$(442)

Total$44,197$44,197$(442)$(442)

Contract
value

Contract over
one yearMarket value

Unrealized
gain (loss)

Total

Interest rate swap:
Thousands of U.S. Dollars
Items

Unrealized
gain (loss)

Interest rate swap

Fair value of transactions as of March 31, 2008 was as follows:
Currency-related transactions:
Millions of Yen
Items

Forward foreign exchange contracts
Sell—USD¥   7,626

—

¥587

¥587

EURO

10,140

—

111

111

Buy—USD

100

—

5

5

EURO

1,777

—

104

104

321

—

15

15

¥19,964

—

¥822

¥822

OptionBuy-Call—USD
Total

Notes: 1. Market value:		 (1) Forward foreign exchange contract: Translated by forward exchange rates
		 (2) Currency option contract: Calculation of market is based on the prices provided by the financial institutions the Company has business connection with.
2. Transactions which are translated at the contracted forward rates are excluded.

Interest rate swap:
Millions of Yen
Items

Contract
value

Contract over
one yearMarket value

Unrealized
gain (loss)

Interest rate swap
Receive floating pay fixed¥11,011¥8,711

¥(82)

¥(22)

Total

¥11,011¥8,711

¥(82)

¥(22)

Notes: 1. The principal amount regarding the interest rate swap is notional. The figures do not indicate market risks relating to the derivative transactions
2. Calculation of market value is based on the prices provided by the financial institutions the Company entered into the interest rate swap contracts with.

HOYA Annual Report 200975

No. 14
STOCK OPTION PLANS
1. Description of Stock Option(1) Description of Stock Option Plans

Type and numberof recipients (Note 1)
Number of stock options bytype of stock to be issued

3rd stocksubscription rights
Directors of the Company

4th stocksubscription rights
8 Directors of the Company

5th stocksubscription rights
8 Directors of the Company

8

Directors of subsidiaries

14 Directors of subsidiaries

5 Directors of subsidiaries

13

Employees of the Company

60 Employees of the Company

54 Employees of the Company

85

Employees of subsidiaries

35 Employees of subsidiaries

43 Employees of subsidiaries

77

Common stock

700,000 Common stock

635,600 Common stock

December 13, 2004

890,000

Grant date

December 12, 2003

Vesting requirements

Remain employed from the grant
Remain employed from the grant
Remain employed from the grant
date (December 12, 2003) to the end date (December 13, 2004) to the end date (January 1, 2006) to the end of
the vesting period.
of the vesting period.
of the vesting period.

Service period

From the grant date to the end of
the vesting period.

Exercise period (Note 2)

From October 1, 2004 to September From October 1, 2005 to September From October 1, 2006 to September
30, 2008
30, 2009
30, 2015

From the grant date to the end of
the vesting period.

6th stocksubscription rights
Type and numberof recipients

January 1, 2006

7th stocksubscription rights

From the grant date to the end of
the vesting period.

8th stocksubscription rights
8 Directors of the Company

9th stocksubscription rights

Directors of the Company

8 Directors of the Company

Directors of subsidiaries

73

Directors of subsidiaries

28 Directors of subsidiaries

9

Employees of the Company

12

Employees of the Company

86

Employees of subsidiaries

88

Employees of subsidiaries

101

Number of stock options bytype of stock to be issued

Common stockGrant dateNovember 7, 2006

November 14, 2007

Vesting requirements

Remain employed from the grant
date (November 7, 2006) to the endof the vesting period.

Remain employed from the grant
Remain employed from the grant
Remain employed from the grant
date (November 14, 2007) to the end date (November 28, 2008) to the end date (February 24, 2009) to the endof the vesting period.
of the vesting period.
of the vesting period.

Service period

From the grant date to the end of
the vesting period.

From the grant date to the end of
the vesting period.

Exercise period

From October 1, 2007 to September From October 1, 2008 to September From October 1, 2009 to September From October 1, 2009 to September
30, 2016
30, 2017
30, 2018
30, 2018

780,800 Common stock

77,600 Common stock

1,036,000 Common stockNovember 28, 2008

From the grant date to the end of
the vesting period.

60,000February 24, 2009

From the grant date to the end of
the vesting period.

Notes: 1. Number of stock options is expressed in number of shares to be issued upon exercise. The number of shares to be issued has been adjusted taking into accounta four-for-one stock split for common stock as of November 15, 2005.
2. Exercise of stock options during the exercise period is subject to terms and conditions stipulated in the agreement of allotment of stock subscription rights
entered into with respective recipients.

76 HOYA Annual Report 2009

(2) Number of Stock Options and Changes in Number of Stock Options
The following tables are based on the stock options which exist as of March 31, 2009. Number of stock options is expressed in
number of shares to be issued upon exercise.
a. Number of stock options (Note)
3rd stocksubscription
rights

4th stocksubscription
rights

5th stocksubscription
rights

6th stocksubscription
rights

7th stocksubscription
rights

8th stocksubscription
rights

9th stocksubscription
rights————77,600——60,000

Unvested
As of March 31, 2008
Granted

—

—

—

—

—

1,036,000

Forfeited

—

—

—

—

—

—

—

Vested————77,600

—

—

—

—

—

—

—

1,036,000

60,000467,600

503,600

889,200

780,800

—

—

—

—

—

—

—

77,600——

Unvested
As of March 31, 2009
VestedAs of March 31, 2008
VestedExercised

400

—

—

—

—

—

—

Forfeited

467,200

—

—

—

—

—

—

—

—

—

—

503,600

889,200

780,800

77,600——

VestedAs of March 31, 2009

Note: Number of shares in the above table is adjusted taking into account a four-for-one stock split for common stock as of November 15, 2005

b. Per unit information
3rd stocksubscription
rights

4th stocksubscription
rights

5th stocksubscription
rights

6th stocksubscription
rights

7th stocksubscription
rights

8th stocksubscription
rights

9th stocksubscription
rightsExercise price (yen) (Note 1)

2,438

2,713

4,150

4,750

4,230

1,556

1,704

Average stock price on
exercise (yen) (Note 1)

2,802

—

—

—

—

—

—

(a)1,113(a)745(a)233(a)372

Fair value per unit
(as of grant date)(yen) (Note 2)

—

—

—

(b)1,224(b)786(b)235(b)378(c) 1,289(c) 800(c) 241(c) 381(d)1,448(d)946(d)243(d)390

Notes: 1. Exercise price and average stock price on exercise in the above table is adjusted taking into account a four-for-one stock split for common stock as of­November 15, 2005.
2. As the 1st stock subscription rights through 5th stock subscription rights were granted before the Corporate Act of Japan became effective, fair value per unit
was not calculated.

HOYA Annual Report 200977

2. Valuation Method for Fair Value of Stock Options
The 8th and 9th stock subscription rights granted for the year ended March 31, 2009 are valued as follows:
Fair value of stock subscription rights is valued for each of the following exercise periods.
(a) From October 1, 2009 to September 30, 2018(b) From October 1, 2010 to September 30, 2018(c) From October 1, 2011 to September 30, 2018(d) From October 1, 2012 to September 30, 2018
a. Option-pricing model used: Black-Scholes modelb. Major assumptions used:
8th stock subscription rights
Stock price to volatility (Note 1)
Estimated time to exercise (Note 2)
Estimated dividends (Note 3)
Risk free rate (Note 4)

(a)

(b)

(c)

(d)

36.12%

35.73%

35.90%

35.73%

5.34 years

5.84 years

6.34 years

6.84 years

¥65

¥65

¥65

¥65

0.90%

0.95%

1.00%

1.05%

9th stock subscription rights
Stock price to volatility (Note 1)
Estimated time to exercise (Note 2)
Estimated dividends (Note 3)
Risk free rate

(Note 4)

(a)

(b)

(c)

(d)

36.95%

36.74%

36.33%

36.55%

5.10 years

5.60 years

6.10 years

6.60 years

¥65

¥65

¥65

¥65

0.70%

0.76%

0.82%

0.88%

Notes: 1. It is based on historical volatility of stock price for the period, corresponding to the estimated time to exercise, prior to the grant date.
2. It is assumed to be exercised in the middle of the exercise period due to the lack of enough data for other reasonable estimation.
3. It is based on the actual dividends for the year ended March 31, 2008.
4. It is based on interest rates on national government bonds with maturity corresponding to the estimated time to exercise.

3. Estimation Methods for Number of Vested Stock Options
Only the actual number of stock options is reflected due to difficulty in estimating the number of stock options to be forfeited in
the future.
4. S tock-based compensation expense is recorded on the consolidated statement of income for the year ended March 31, 2009
as follows:
Cost of sales¥ 63 million

Selling, general and administrative expenses¥243 million

78 HOYA Annual Report 2009

No. 15NET INCOME PER SHARE
Reconciliation of the differences between basic and diluted net income per share (“EPS”) for the years ended March 31, 2009, 2008
and 2007 was as follows:
Millions of Yen

Thousands ofSharesYen

U.S. Dollars

Net Income

WeightedAverage
SharesEPS

EPS¥25,110432,858

For the year ended March 31, 2009
Basic EPS—Net income available to common shareholders¥58.01

$0.59
$0.59

Effect of dilutive securities—Stock options—

67

Diluted EPS—Net income for computation¥25,110

432,925¥58.00¥189.01

For the year ended March 31, 2008
¥81,725

432,383

Effect of dilutive securities—Stock options

Basic EPS—Net income available to common shareholders—

522

Diluted EPS—Net income for computation¥81,725

432,905¥188.78¥83,391

430,968¥193.50

For the year ended March 31, 2007
Basic EPS—Net income available to common shareholders
Effect of dilutive securities—Stock options

—

1,615

Diluted EPS—Net income for computation¥83,391

432,583¥192.78

No. 16
SEGMENT INFORMATION
Information about industry segments, geographical segments and sales to foreign customers of the Company and subsidiaries forthe years ended March 31, 2009, 2008 and 2007 was as follows:(1) Industry Segments
a. Sales and Operating Income
Millions of Yen
2009
Information Technology

Sales to customers
Intersegment sales
Total sales

Eye Care

Electro-Optics

Photonics

Vision Care

Health Care

¥163,902¥6,367¥110,725¥49,968

PentaxOther
Businesses¥122,190¥1,043

Total

Eliminations
andCorporate

Consolidated¥454,195¥

¥454,195

—

274

583

11

—

13

4,073

4,954

(4,954)—

164,176

6,950

110,736

49,968122,203

5,116

459,149(4,954)454,195

Operating expenses

124,464

6,653

88,92938,424

133,775

4,881

397,126(2,026)395,100

Operating income (loss)¥ 39,712¥  297¥ 21,807¥11,544¥(11,572)¥  235¥ 62,023¥(2,928)¥ 59,095

HOYA Annual Report 200979

b. Assets, Depreciation, Loss on Impairment of Long-Lived Assets and Capital Expenditures
Millions of Yen
2009

AssetsDepreciation

Other
Businesses

Electro-Optics

Photonics

Vision Care

Health Care

Total

¥186,864¥6,810¥101,603¥26,609¥141,022¥3,034¥465,942¥125,154¥591,096

27,430

183

7,685

1,215

13,24667

49,826205

50,031

Impairment loss
Capital expenditures

PentaxEliminations
andCorporate

Information Technology

Eye CareConsolidated

758

—

87

—

29,54767

30,459—30,45920,242

131

7,294

1,507

5,119

195

34,488351

34,839Eliminations
andCorporate

Consolidated

a. Sales and Operating Income
Thousands of U.S. Dollars
2009
Information Technology
Electro-Optics

Sales to customers

Photonics

Eye Care
Vision Care

Health Care

Total

$10,618 $4,623,790

$

2,791

5,941

112

—

131

41,46450,439(50,439)—

1,671,341

70,754

1,127,318

508,681

1,244,053

52,082

4,674,229(50,439)

4,623,790

Operating expenses

1,267,062

67,729905,318

391,159

1,361,857

49,695

4,042,820(20,628)

4,022,192

Operating income (loss)$  404,279 $ 3,025 $  222,000Intersegment sales
Total sales$1,668,550 $64,813 $1,127,206

Other
Businesses

Pentax$508,681 $1,243,922$117,522 $ (117,804)$ 2,387 $  631,409— $4,623,790$(29,811) $  601,598

b. Assets, Depreciation, Loss on Impairment of Long-Lived Assets and Capital Expenditures
Thousands of U.S. Dollars
2009
Information Technology
Electro-Optics

AssetsPhotonics

Eye Care
Vision Care

$1,902,308 $69,328 $1,034,336

Other
Businesses

PentaxEliminations
andCorporate

Consolidated$30,893 $4,743,384 $1,274,090$6,017,474

Health Care

Total

$270,888 $1,435,631

Depreciation

279,238

1,862

78,23812,365

134,844686

507,233

2,091

Impairment loss

7,718

—

881

—

300,793683

310,075—

310,075

206,068

1,331

74,25815,33952,1081,987

351,091

3,572

354,663

Total

Eliminations
andCorporate

Consolidated¥¥481,631

Capital expenditures

509,324

a. Sales and Operating Income
Millions of Yen
2008
Information Technology

Eye Care

Other
Businesses

PentaxElectro-Optics

Photonics

Vision Care

Health Care

Sales to customers¥209,883¥9,090¥126,338¥46,177¥89,032¥1,111¥481,631

Intersegment sales

383

246

(2)

—

2

2,761

3,390

(3,390)—210,266

9,336

126,336

46,17789,034

3,872

485,021(3,390)481,631

Operating expenses

142,8028,512

105,683

36,011

89,1684,227

386,403

154

386,557

Operating income (loss)¥ 67,464¥  824¥ 20,653¥10,166¥ (134)¥ (355)¥ 98,618¥(3,544)¥ 95,074

Total sales

80 HOYA Annual Report 2009—

b. Assets, Depreciation, Loss on Impairment of Long-Lived Assets and Capital Expenditures
Millions of Yen
2008
Information Technology

AssetsDepreciation

PentaxOther
Businesses
Total

Eliminations
andCorporate

Consolidated

Electro-Optics

Photonics

Vision Care

Health Care

¥210,007¥8,037¥112,379¥24,416¥204,853¥2,818¥562,510¥126,934¥689,444

27,653

138

7,728

1,311

7,856

47

44,733143

44,876

—

—

61

212

179

129

581

—

581

24,431

141

9,434

848

4,455

146

39,455

10

39,465

Impairment loss
Capital expenditures

Eye Carea. Sales and Operating Income
Millions of Yen
2007
Other
Businesses

Electro-Optics

Photonics

Vision Care

Health Care

Total

Eliminations
andCorporate

Sales to customers¥219,252¥9,093¥119,808¥40,850¥1,090¥390,093¥Intersegment sales

414

248

0

0

2,766

3,428

(3,428)—219,666

9,341

119,808

40,8503,856

393,521(3,428)390,093

Information Technology

Total sales

Eye Care—Consolidated¥390,093

Operating expenses

139,581

8,851

98,641

31,635

4,206

282,914(34)

282,880

Operating income (loss)¥ 80,085¥  490¥ 21,167¥ 9,215¥(350)¥110,607¥(3,394)¥107,213

b. Assets, Depreciation, Loss on Impairment of Long-Lived Assets and Capital Expenditures
Millions of Yen
2007
Information Technology

AssetsDepreciation
Impairment loss
Capital expenditures

Other
Businesses

Eye CareTotal

Eliminations
andCorporate

Consolidated

Electro-Optics

Photonics

Vision Care

Health Care

¥258,746¥7,761¥118,229¥24,410¥2,518¥411,664¥35,980¥447,644

27,449

125

7,405

1,170

45

36,194145

36,339

—

—

—

—

88

88

—

88

39,899155

11,672

2,119

90

53,935497

54,432

Notes: 1. The Company and subsidiaries primarily engage in the manufacture and sale of products in six major segments grouped on the basis of similarities in the types,
nature and market of the products. The six segments, namely, Electro-Optics, Photonics, Vision Care, Health Care, Pentax, and Other Businesses, consist primarily of the following products:
		 Electro-Optics:	Photomasks and mask blanks for semiconductors, masks for liquid-crystal display (LCD), parts for glass panels of LCDs, glass disks for harddisk drives (HDDs), optical lenses, optical glasses, electronic glasses, optical communication products, etc.
		 Photonics:	Laser equipment, light sources for use in the electronics industry, special optical glass, etc.
		 Vision Care:
Eyeglasses, eyeglass frames, etc.
		 Health Care:
Contact lenses and related accessories, intraocular lenses, etc.
		 Pentax:
Endoscopes, medical accessories, bone prosthesis, CHT Ceramic Hydroxapatite, etc.
			
Digital cameras, interchangeable lenses, accessories for cameras, etc.
			
Digital camera modules, micro lenses, CCTV lenses, etc.
		 Other Businesses: Crystal glass products, construction of information systems, outsourcing, etc.
2. Corporate operating expenses consist primarily of the administration expenses of the Company and foreign holding companies, which are not allocated toindustry segments. Corporate operating expenses for the years ended March 31, 2009, 2008 and 2007 were ¥3,917 million ($39,875 thousand), ¥6,289 million and¥3,370 million, respectively.
3. Corporate assets consist primarily of cash, time deposits, investment securities and administrative assets of the Company and the foreign holding companies.
Corporate assets as of March 31, 2009, 2008 and 2007 were ¥ 154,404 million ($1,571,863 thousand), ¥153,256 million and ¥61,381, respectively.
4. Consolidated operating expenses are equal to the total of cost of sales and selling, general and administrative expenses shown in the accompanying consolidated statements of income.

HOYA Annual Report 200981

(2) Geographical Segments
The geographical segments of the Company and subsidiaries for the years ended March 31, 2009, 2008 and 2007 are summarized
as follows:
Millions of Yen
2009
Eliminations
andCorporate

Japan

North
America

Europe

Asia

Total

Sales to customers¥259,631¥55,028¥97,144¥ 42,392¥454,195¥

Intersegment sales

52,496707

889

135,030

189,122(189,122)—

312,127

55,73598,033

177,422643,317(189,122)

454,195

304,756

54,51093,090141,650594,006(198,906)

395,100

Total sales
Operating expenses
Operating income (loss)
Assets—Consolidated¥454,195

7,371

1,225

4,943

35,772

49,311

9,784

59,095¥249,701¥33,681¥64,607¥217,187¥565,176¥ 25,920¥591,096

Eliminations
andCorporate

Consolidated$4,623,790

Thousands of U.S. Dollars
2009

Japan

North
America

Europe

Asia

Total

Sales to customers$2,643,090$560,196$988,946$  431,558$4,623,790$Intersegment sales

534,421

7,199

9,053

1,374,628

1,925,301(1,925,301)—

3,177,511

567,395

997,999

1,806,186

6,549,091(1,925,301)

4,623,790

3,102,470

554,922947,680

1,442,019

6,047,091(2,024,899)

4,022,192

Total sales
Operating expenses
Operating income (loss)
Assets—75,041

12,47350,319364,167

502,000

99,598

601,598$2,542,006$342,878$657,710$2,211,004$5,753,598$ 263,876$6,017,474

Eliminations
andCorporate

Consolidated

Millions of Yen
2008

Sales to customers
Intersegment sales
Total sales
Operating expenses
Operating income (loss)
Assets82 HOYA Annual Report 2009

Japan

North
America

Europe

Asia

Total

¥291,566¥56,680¥89,420¥ 43,965¥481,631¥—¥481,631

54,012

374

757

157,230

212,373(212,373)—

345,578

57,05490,177201,195

694,004(212,373)

481,631315,42151,78883,359157,360

607,928(221,371)

386,557

30,157

5,266

6,818

43,83586,076

8,998

95,074¥333,040¥37,722¥66,642¥228,174¥665,578¥ 23,866¥689,444

Millions of Yen
2007

Sales to customers
Intersegment sales

Japan

North
America

Europe

Asia

Total

¥270,373¥37,456¥ 51,336¥ 30,928¥390,093

Eliminations
andCorporate¥—Consolidated¥390,093

26,847305

813

159,124

187,089(187,089)—

297,220

37,761

52,149190,052

577,182(187,089)

390,093

Operating expenses

257,02136,91644,663

135,227

473,827(190,947)

282,880

Operating income (loss)

40,199845

7,486

54,825

103,355

3,858

107,213¥193,390¥13,507¥107,564¥207,158¥521,619¥ (73,975)¥447,644

Total sales

Assets

Notes: 1. The Company and subsidiaries are summarized in four segments by geographic area based on the countries where the Group is located. The segments consistof the following countries:
		 North America: United States of America, Canada, etc.
		 Europe:
Netherlands, Germany, United Kingdom, etc. (including South Africa)
		 Asia:
Singapore, Thailand, China, Republic of Korea, Taiwan, etc. (including Australia)
2. Corporate operating expenses consist primarily of the administration expenses of the Company, which are not allocated to segments by geographic area. Corporate operating expenses for the years ended March 31, 2009, 2008 and 2007 were ¥3,807 million ($38,753 thousand), ¥4,142 million and ¥2,993 million, respectively.
3. Corporate assets consist primarily of cash, time deposits, investment securities and administrative assets of the Company. Corporate assets as of March 31,
2009, 2008 and 2007 were ¥109,897 million ($1,118,773 thousand), ¥115,499 million and ¥59,047 million, respectively.
4. Consolidated operating expenses are equal to the total of cost of sales and selling, general and administrative expenses shown in the accompanying consolidated statements of income.

(3) Sales to Foreign Customers
The sales to foreign customers of the Company and subsidiaries for the years ended March 31, 2009, 2008 and 2007 are summarized as follows:
Millions of Yen
2009
North America

Overseas sales (A)¥55,915

EuropeAsia¥99,800¥126,716

Other

Total

¥1,401

Consolidated sales (B)(A)/(B)¥283,832
454,195

12.3%

22.0%

27.9%

0.3%

62.5%

Thousands of U.S. Dollars
2009

Overseas sales (A)North America

EuropeAsia$569,225$1,015,984$1,289,996

Other$14,261

Total

12.3%

22.0%

27.9%

0.3%

Consolidated sales (B)(A)/(B)$2,889,466
4,623,790
62.5%

HOYA Annual Report 200983Millions of Yen
2008
North America

Overseas sales (A)Europe

Asia

Other

Total

¥59,294¥92,116¥140,433¥1,268

12.3%

19.1%

29.2%

0.3%

Consolidated sales (B)(A)/(B)¥293,111
481,631
60.9%

Millions of Yen
2007
North America

Overseas sales (A)¥44,954

Europe¥53,524

Asia¥113,060

Other

Total

¥8

Consolidated sales (B)(A)/(B)¥211,546
390,093

11.5%

13.7%

29.0%

0.0%

54.2%

Note:	The Company and subsidiaries are summarized in four segments by geographic area based on the countries where the customers are located. The segments
consist of the following countries:
North America: United States of America, Canada, etc.
Europe:Netherlands, Germany, United Kingdom, etc. (including South Africa)
Asia:
Singapore, Thailand, Republic of Korea, Taiwan, etc. (including Australia)
Other:
Saudi Arabia and Brazil, etc.

84 HOYA Annual Report 2009

HOYA Annual Report 200985

Corporate Data
(As of March 31, 2009)

Established
November 1, 1941

Directors and Executive Officers (As of June 16, 2009)

Paid-in Capital¥6,264,201,967

Takeo Shiina* (Executive Advisor of IBM Japan, Ltd.)

Directors
Yuzaburo Mogi* (Representative Director, Chairman & CEO of ­Kikkoman

Employees
Hoya Corporation   4,821 (down 384 from March 31, 2008)   Average age: 42.6   Average years of service: 16.5

Corporation)

Eiko Kono* (Former Special Advisor of Recruit Co., Ltd.)
Yukiharu Kodama* (President of the Mechanical Social Systems Foundation)
Itaru Koeda* (Executive Advisor, Honorary Chairman of Nissan Motor Co., Ltd.)

Hoya Group (Consolidated)   34,592 (down 953 from March 31, 2008)

Hiroshi Suzuki

Fiscal Year
From April 1 to March 31 of the following year

Kenji Ema

Hiroshi Hamada

Ordinary General Meeting of Shareholders
June* Outside directors

Record Dates
For the Ordinary General Meeting of Shareholders: March 31
For dividends from surplus: March 31, September 30

Executive Officers
Hiroshi Suzuki (President & CEO)
Hiroshi Hamada (Executive Officer & COO)
Kenji Ema (Executive Officer & CFO)
Hiroaki Tanji (Executive Officer, Planning)
Taro Hagiwara (Executive Officer, Technology)

Hoya Group Business Matrix by Business Segment and Area
Global Headquarters(Formulates Group strategies)

Eye CarePentaxJapan

Legal and Financial Support

Information Technology

Asia(Regional headquarters)

United States(Regional headquarters)

EU/FHQ(Regional headquarters andGroup financial headquarters)

Global Business Expansion

86 HOYA Annual Report 2009

Timeline(As of March 31, 2009)

1996

1941
November An optical glass production plant was established in the city of Hoya,

Augustin metropolitan Tokyo, and production of optical glass was initiated.
1944
AugustNovember Kumamoto Plant commenced operations as a photomask manufac-

turing plant.

The plant was incorporated with capital of ¥1.2 million.
1997

1945
October

Crystal products were introduced.

April

Hoya introduced its “internal company system,” reorganizing Group
operations centered on two internal companies (Electro-Optics andVision Care) and three subsidiaries (Hoya Photonics, Inc., Hoya
Healthcare Corporation, and Hoya Crystal Corporation). Hoya implemented ERP R/3, an enterprise resource planning system developedby SAP AG of Germany.

May

Hoya Holdings Asia Paciﬁc Pte Ltd. was established as the third regional
headquarters after Hoya Holdings N.V. and Hoya Holdings, Inc., theregional headquarters for Europe and North America, respectively.

1947
AugustCompany name changed to Hoya Crystal Glass Manufacturing Co., Ltd.

1952
February

The manufacture of optical glass BK7 resumed.

1960
November The Optics Division’s Showa Plant (currently Akishima Plant) wascompleted in Tokyo. The Company merged with three affiliates.

December Hoya Lens Deutschland GmbH became the ﬁrst Group company to1961
October

Hoya was listed on the Second Section of the Tokyo Stock Exchange.

1962
May
October

The manufacture of eyeglass lenses commenced.
Hoya was listed on the Second Section of the Nagoya Stock Exchange.

1963
May

The Crystal Division’s Musashi Plant was completed.

1967
April

The Vision Care Division launched sales of progressive multifocal lenses.

1972
December Sales of soft contact lenses began.

1973
February

The Company’s listings were advanced to the First Section of theTokyo and Nagoya Stock Exchanges.

receive ISO 14001 certiﬁcation.
1998
April

The Electronics Division’s Nagasaka Plant was completed, and the
production of IC substrates began. Hoya’s on-line network to handle
eyeglass lens orders was introduced in the Vision Care Division.

1982
October

Hoya Electronics Co., Ltd., merged with the parent company.

1983
January

The construction of the Hachioji Plant in the Electronics Division wascompleted, and the production of IC photomasks commenced.

Hoya began the quarterly release of consolidated ﬁnancial results.
The Vision Care Company’s Itsukaichi Plant became the Group’s ﬁrst
domestic facility to receive ISO 14001 certiﬁcation.

1999
February

All major domestic plants received ISO 14001 certiﬁcation.

September Hoya acquired Belgian eyeglass manufacturer Buchmann OpticalIndustries N.V.
2000
April

Hoya acquired Optical Resources Group, Inc. (ORI), a processor andmarketer of eyeglasses in the United States (integrated into Hoya
Corporation in March 2001).

July

Hoya acquired the semiconductor photomask production division of
Oki Electric Industry Co., Ltd.

1974
January

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

2001
May

Hoya began marketing HOYALUX Summit Pro and NuLux lenses thatuse EYRY, a high-index, plastic lens material.

October

Hoya began manufacturing soft intraocular lenses.

2002
May

Hoya began manufacture and sale of 3C-SiC, a new substrate material for semiconductors.

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

1984
August

The current Head Office was completed.

2003

October

Hoya Lens Corporation and Hoya Crystal Corporation merged withthe parent company.

January

Company delisted from the First Section of the Nagoya Stock Exchange.

March

Subsidiaries Hoya Crystal Corp. and Hoya Crystal Shop Corp. mergedwith Hoya Corporation.

The Kodama Plant was completed for medical-related production
and research.

June

Hoya adopted a company-with-committees system.

July

Global ﬁnancial management operations were transferred to aregional headquarters in Europe.

1985
April

1986
October

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

1987
June

The production of intraocular lenses (IOLs) commenced.

2004
February

Subsidiary Hoya Optics Corp. was merged with Hoya Corporation.

March

Hoya acquired the HDD glass disk business of Nippon Sheet GlassCo., Ltd.

October

Established a Level-1 American Depositary Receipt (ADR) program.

November The production of aspherical molded-glass lenses commenced.

1989
April

November A four-for-one split of common shares was implemented.

Glass disks for HDDs were launched.

March

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

Hoya Group’s Environmental Philosophy was established.

OctoberContact lens production sector transferred to a subsidiary, Hoya
Healthcare Corporation.

The Hoya Group was reorganized with the establishment of the­Electro-Optics Division, the Vision Care Division and the Crystal Division.

August

1991
March

2005

Hoya Europe B.V. of the Netherlands (currently Hoya Holdings N.V.)
and Hoya Corporation USA were established.

2006

1993
October

1994
April

2007

1995
June

Hoya introduced an outside director system.

Pentax Corporation converted to consolidated subsidiary throughacquisition of shares via takeover bid.

2008
March

Pentax Corporation absorbed via merger.

2009
March

Withdrawal from Crystal glassware business.

HOYA Annual Report 200987

Hoya Group Global Network(As of March 31, 2009)

EuropeAsia and Oceania

Regional Headquarters
HOYA HOLDINGS N.V.
Amsterdamseweg 29, 1422 AC Uithoorn, The Netherlands
TEL +31-0297-514-356

Regional Headquarters
HOYA HOLDINGS ASIA PACIFIC PTE LTD.
138 Cecil Street, #08-03 Cecil Court, Singapore 069538
TEL +65-6323-1151

HOYA HOLDINGS (ASIA) B.V.

Information Technology
HOYA ELECTRONICS MALAYSIA SDN. BHD.
HOYA MICROELECTRONICS (SUZHOU) LTD.
HOYA MICROELECTRONICS TAIWAN CO., LTD.
HOYA ELECTRONICS KOREA CO., LTD.
HOYA MAGNETICS SINGAPORE PTE LTD.
HOYA GLASS DISK (THAILAND) LTD.
HOYA GLASS DISK PHILIPPINES, INC.
HOYA GLASS DISK VIETNAM LTD.
HOYA OPTO-ELECTRONICS QINGDAO LTD.
HOEV CO., LTD.
HOYA OPTICS (THAILAND) LTD.
HOYA OPTICAL TECHNOLOGY (SUZHOU) LTD.
HOYA OPTICAL (ASIA) CO., LTD.
EAST CHEER INVESTMENT LIMITEDSHENZHEN KTM GLASS SUBSTRATE CO., LTD.
KTM GLASS SUBSTRATE HONG KONG CO., LIMITEDHOGP LAND HOLDINGS, INC.

Information Technology
HOYA CONBIO FRANCE EURLEye Care
HOYA LENS DEUTSCHLAND GMBH
HOYA LENS DANMARK A/SHOYA LENS U.K. LIMITEDHOYA LENS NEDERLAND B.V.
HOYA LENS FINLAND OYHOYA LENS ITALIA S.P.A.
HOYA LENS IBERIA S.A.
HOYA LENS SWEDEN AB
HOYA LENS FRANCE S.A.S.
HOYA LENS POLAND SP. Z O.O.
HOYA LENS BELGIUM N.V.
HOYA LENS HUNGARY RT.
HOYA LENS MANUFACTURING HUNGARY RT
HOYA HILL OPTICS SA (PTY) LTD.
HOYA LENS NORWAY AS
HOYA SURGICAL OPTICS GMBH
HOYA LENS CZ. A. S.
PentaxPENTAX EUROPE N.V.
PENTAX EUROPE GMBH
SISTEMAS INTEGRALES DE MEDICINA, S.A.
PENTAX NEDERLAND B.V.
PENTAX ITALIA S.R.L
PENTAX U.K. LTD.
PENTAX FRANCE S.A.S.
PENTAX SCHWEIZ AG

88 HOYA Annual Report 2009

North America
Eye Care
HOYA LENS THAILAND LTD.
HOYA LENS AUSTRALIA PTY. LTD.
HOYA LENS TAIWAN LTD.
HOYA LENS (S) PTE. LTD.
HOYA LENS HONG KONG LTD.
HOYA LENS KOREA CO., LTD.
HOYA LENS GUANGZHOU LTD.
HOYA LENS PHILIPPINES, INC.
MALAYSIAN HOYA LENS SDN. BHD.
THAI HOYA LENS LTD.
HOYA MEDICAL SINGAPORE PTE.LTD.
HOYA LENS SHANGHAI LTD.
HOYA LENS MANUFACTURING MALAYSIA SDN. BHD.
HOYA HEALTHCARE (SHANGHAI) CO., LTD.
HOYA LENS INDIA PRIVATE LTD.
HOYA LENS VIETNAM LTD.
PT HOYA LENS INDONESIA
FOCUS PREFERENCE SDN. BHD.
PentaxPENTAX CEBU PHILIPPINES CORPORATIONPENTAX HONG KONG LTD.
PENTAX VN CO., LTD.
PENTAX(SHANGHAI) CORPORATIONPENTAX SINTAI HOLDING CO., LTD.
PENTAX SINTAI OPTICAL INSTRUMENT(SHENZHEN) CO., LTD.
PENTAX VQ CO., LTD
PENTAX BASO (GUANGZHOU) OPTOMECHATRONICS CO., LTD.
PENTAX VOICEWARE CO., LTD.
PENTAX OPTICAL COMPONENT HONG KONG LTD.
PENTAX TRADING (SHANGHAI) CO., LTD.
PENTAX MEDICAL SINGAPORE PTE LTD.
TI PENTAX HOLDING CO.,LTD. u

Regional Headquarters
HOYA HOLDINGS, INC.
101 Metro Drive, Suite 500, San Jose, CA 95110, U.S.A.
TEL +1-408-441-0400
Information Technology
HOYA CORPORATION USA
HOYA PHOTONICS, INC.
RADIANT IMAGES, INC.
Eye Care
HOYA LENS CANADA, INC.
HOYA LENS OF AMERICA, INC.
EAGLE OPTICS, INC.
HOYA LENS OF CHICAGO, INC.
HOYA LENS OF NEW ORLEANS, INC.
MORGAN OPTICAL, INC.
VISION MEMBRANE TECHNOLOGIES, INC.
HOYA SURGICAL OPTICS, INC.
OPTOTAL HOYA S.A.u
PentaxPENTAX OF AMERICA, INC.
PENTAX CANADA INC.
MICROLINE SURGICAL INC.
NEOSPEECH, INC.

uEquity-method affiliate

HOYA Annual Report 200989

Investor Information(As of March 31, 2009)

Listing of the Company’s SharesFirst Section of the Tokyo Stock Exchange

Share Ownership
Ownership

Shares of Common Stock
Authorized: 1,250,519,400 shares
Issued:435,017,020 shares

Individuals,
others
19.0%

Trading Unit
100 shares
Number of Shareholders
83,770Financial institutions
0.3%

Shareholders

Other corporate
investors
0.6%

Financial
institutions
27.7%

Foreign investors
51.3%

Individuals, others
98.3%

Foreign investors
0.8%

Other corporate investors
2.0%

Principal Shareholders
Number of Shares(Hundreds of shares)

Shareholder

Percentage ofInvestment

1

JP Morgan Chase Bank 380055

391,641

9.05

2

Japan Trustee Services Bank, Ltd. (Trust Account)

300,296

6.94

3

Japan Trustee Services Bank, Ltd. (Trust Account 4G)

234,984

5.43

4

The Master Trust Bank of Japan, Ltd. (Trust Account)

184,6624.27

5State Street Bank and Trust Company

139,032

3.21

6

The Chase Manhattan Bank NA London SL Omnibus Account104,8092.42

7State Street Bank and Trust Company 505225

96,5002.23

8Mamoru Yamanaka

90,1972.08

9Deutsche Bank Trust Company Americas

85,597

1.98

10

Mellon Bank NA as Agent for its Client Mellon Omnibus US Pension
Total

77,9281.80

1,705,648

39.41

Note: Treasury stock (2,160,060 shares) is excluded from calculation of percentage of investment.

Issuance of Stock Subscription Rights

Stock subscription rights are issued as stock options, based on Board of Directors resolutions.
Eighth Issue(Resolved by the Board of Directors on November 10, 2008)
1.	Stock subscription rights granted: 2,590
2.	Class and number of shares to be issued upon exercise ofstock subscription rights: 1,036,000 shares of common stock(400 shares per stock subscription right)
3.	Paid-in amount for stock subscription rights: Gratis
4.	Exercise value per share at exercise of stock subscription
rights: ¥1,556
5.	Exercise period of stock subscription rights: From
­October 1, 2009, to September 30, 2018. However, limits
on exercise volume per period are determined separately.

Transfer Agent

Mitsubishi UFJ Trust and Banking Corporation
Corporate Agency Department
7-10-11 Higashisuna, Koto-ku
Tokyo 137-8081, Japan
Tel: +81-3-5683-5111

90 HOYA Annual Report 2009

Ninth Issue(Resolved by the Board of Directors on ­February 5, 2009)
1.	Stock subscription rights granted: 150
2.	Class and number of shares to be issued upon exercise ofstock subscription rights: 60,000 shares of common stock(400 shares per stock subscription right)
3.	Paid-in amount for stock subscription rights: Gratis
4.	Exercise value per share at exercise of stock subscription
rights: ¥1,704
5.	Exercise period of stock subscription rights: From ­October 1,
2009, to September 30, 2018. However, limits on exercise
volume per period are determined separately.

Stock Price and Trading Volume
Fiscal 2008

Fiscal 2009

Trading Volume (Thousands of shares)

Stock Price (Yen)

200,000

4,000

150,000

3,000

100,000

2,000

50,000

1,000

0

0

4
2007

5

6

7

8

9

10

11

12

1
2008

2

3

4

5

6

7

8

9

10

11

12

1
2009

2

3

Share Price
2007

2008

2009

High

Low

High

Low

High

Low

January–March¥4,750¥3,810¥3,460¥2,200¥2,105¥1,500April–June¥4,210¥3,660¥3,100¥2,400July–September¥4,340¥3,640¥2,535¥1,922October–December¥4,320¥3,440¥2,230¥1,212For additional information about this publication, contact:

HOYA Group

Corporate Communications
HOYA Service Corporation
1-29-9 Takadanobaba, Shinjuku-ku,
Tokyo 169-8661 Japan
TEL +81-3-3232-0062 FAX +81-3-3232-7198
URL http://www.hoya.co.jp/

HOYA Annual Report 200991

H O YA A nnual R epor t 2009

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

http://www.hoya.co.jp/

This report is printed on recycled paper
Printed in Japan