Effective from the fiscal year ended March 31, 2011, the Company prepares its consolidated financial statements in compliance with IFRSs. With respect to reporting segments presented in the overview of operation by business category, Hoya divides its business into three reporting segments in accordance with IFRS 8. These segments are Information Technology, Life Care, and Other Businesses.

The reporting segments are constituent units of the Group for which separate financial information is obtained and reviewed regularly by the Board of Directors, the Group’s chief operating decision making body, to determine the allocation of management resources and evaluate business performance. In accordance with its management philosophy, the Group has categorized "information technology" and "life and culture" as its business domains. To achieve sustained growth in corporate value in these business domains, the Group makes decisions on the allocation of management resources and monitors their operating results. As a consequence, the Group consists of three reporting segments consistent with the above business domains: Information Technology, Life Care and Other Businesses.

The Information Technology business handles products for the myriad of applications spawned by the digitalization of information and the emergence of the Internet. This segment produces and sells a broad array of I/O (input/output) device related products in the information technology sector, including electronics related products that are essential for modern digital information and communications technologies, and optical technology-based imaging related products that are necessary to import pictures and video images as digital information.

The Life Care business produces and sells health care related products for daily use in the healthcare and medical sectors, and medical related products, including equipment and materials for use in medical procedures. This segment is typically required to obtain approvals and permissions in accordance with the Pharmaceutical Affairs Act in Japan and other regulations. As a result, sophisticated technologies and highly reliable quality control systems are critical for smooth business operation in this sector.

The Other Businesses segment mainly offers information system services, and takes charge of new businesses.

In the fiscal year under review, the global economy saw a measure of recovery, mainly in emerging nations. However, the economic outlook for the U.S. and Europe remains clouded. In Japan, the continued strength of the yen has produced an elevated sense of caution, especially among exporters. To make matters worse, the Great East Japan Earthquake that struck on March 11, 2011, together with the resulting crisis at affected nuclear power plants, have combined darken the mood, not only in the affected regions, but indeed the entire Japanese economy.

Against this backdrop, the Hoya Group's production and shipments increased year on year owing to growth in orders accompanying the markets’ recovery. However, sales were significantly affected by lower product prices and the strong yen. Hoya was also affected by quake related damage at both customers and suppliers, and by a decline in shipments enforced by production stoppages at some of its own plants.

As a consequence, consolidated net sales amounted to ¥413,349 million, up ¥10,920 million (2.7%) year on year. By principal business segment, net sales increased 3.9% year on year in the Information Technology business, and rose 1.9% year on year in the Life Care business.

By customer region, net sales to customers in Japan increased 5.1%, to ¥160,210 million, while net sales to overseas customers grew 1.2%, to ¥253,139 million. As a result, the composition of net sales was 38.8% domestic and 61.2% overseas.

In currency markets during the fiscal year under review, the yen rose 8.0% against the U.S. dollar, to ¥85.22, 13.8% against the euro, to ¥112.61, and 0.4% against the Thai baht, to ¥2.74 compared with the previous year. For the Group overall, exchange rates reduced net sales by ¥17,324 million. If converted using the previous fiscal year's rates, net sales would have increased by ¥28,244 million (7.0%) year on year.

Sales

As outlined above, net sales increased 2.7% year on year to ¥413,349 million. In addition, cost cutting initiatives centering on fixed costs resulted in lower expenditure. As a result, income before taxes from continuing operations rose 26.2% year on year, to ¥63,758 million.

The pretax margin was 15.4%, up 2.8 percentage points year on year from 12.6%.

Contributing factors to the increase in income before taxes included the following: The Company reported brisk growth in sales of glass disks for hard disk drives (HDDs), optical lenses and optical glass. In digital cameras, meanwhile, new product launches and price protection initiatives combined with cost reductions in sales promotion to boost profitability, such that the business went from posting a large pretax loss the previous fiscal year to delivering a pretax profit in this.

In the Life Care business, healthcare related products (eyeglass lenses and contact lenses) fared well, while in medical related products (endoscopes for medical use), profitability improved year on year amid a recovery in the market.

On April 28, 2010, moreover, Hoya Corporation completed an agreement to transfer the hard disk glass media manufacturing business and related assets operated by Hoya Corporation and Hoya Magnetics Singapore, Pte., Ltd., its wholly owned subsidiary, to the U.S. company Western Digital Corporation as of June 30, 2010. For the fiscal year under review, Hoya classified the HDD glass media business as a discontinued operation, booking a ¥10,343 million gain on the sale. Including income for the year from discontinued operations, income for the year from all operations increased 43.5% year on year, to ¥59,579 million.

The hard disk market is expected to continue to see high growth going forward, mainly for notebook PCs and digital household appliances. Following the transfer, Hoya aims to leverage its glass materials technology and precision processing technology and concentrate management resources on its HDD glass substrates, which currently holds the leading global market share, to further enhance business competitiveness and achieve growth.

Return on assets (ROA) was 10.5%, and return on equity attributable to owners of the Company (ROE) was 16.3%, both representing year-on-year improvements.

Profit before tax/Net income

Profit Ratios

Profitability

Stock Price Data

Hoya determines dividends for each fiscal year by taking into account the Company's performance and medium- and long-term capital requirements. It also tries to strike a balance between returning profits to shareholders, employee welfare benefits, and supplementing internal reserves to fund future growth. Hoya's policy regarding internal reserves is to continue to actively appropriate resources for marketing for consumer products, primarily in the medical field, while also making timely investments in corporate mergers and acquisitions and R&D for future growth, as well as investing to ensure sufficient production capacity and to develop next-generation technologies and new products.

In the fiscal year under review, after balancing the need for internal reserves for future growth, Hoya paid an interim dividend of ¥30 per share and a year-end dividend of ¥35 per share, for an aggregate dividend of ¥65 per share for the full year, on a par with the previous fiscal year.

Dividends per share

Total assets as of March 31, 2011 stood at ¥578,641 million, an ¥18,351 million or 3.3% increase compared with a year earlier.

Non-current assets declined ¥16,953 million, or 7.7% year on year, to ¥204,185 million.

Current assets increased ¥35,304 million, or 10.4%, year on year to ¥374,456 million. This was largely attributable to other short-term financial assets increasing ¥21,379 million year on year, to ¥26,964 million, and to cash and cash equivalents rising ¥17,313 million year on year, to ¥185,252 million.

Non-current liabilities were down ¥2,658 million from the previous fiscal year-end, to ¥111,961 million, largely because of a ¥2,226 million drop in interest-bearing long-term debt.

Current liabilities increased by ¥2,218 million year on year, to ¥201,100 million.

Total equity rose ¥18,792 million year on year, to ¥377,541 million, due in part to an increase of ¥31,703 million in retained earnings. Equity attributable to owners of the Company, which is obtained by deducting non-controlling interest in equity from total equity, amounted to ¥376,836 million, improving the ratio of equity attributable to owners of the Company by 1.3 percentage points year on year, to 65.1%.

Total Assets/Total equity/Owners' Equity Ratio

Capital expenditures during the fiscal year under review totaled ¥38,488 million, 32.6% more than in the previous fiscal year. Investment in the Information Technology business accounted for approximately 70% of the total. These investments were aimed at next-generation advanced technologies and expanding production capacity, with a focus on expanding and strengthening facilities for semiconductor-related products and glass disks for HDDs. In the Life Care business, the company invested to boost production capacity, centering on Asian production plants, with a view to expanding eyeglass lens production volume.

Depreciation and amortization costs for the fiscal year under review decreased 2.6%, to ¥30,369 million. The Information Technology segment accounted for approximately 60% of this, at ¥19,111 million.

Capital Expenditure/Depreciation and Amortization