The objectives of the HOYA Group (HOYA)´s disclosure policy are to enable the value of its shares listed in securities markets to be set appropriately and to contribute to the sound development of securities markets in compliance with the rules of stock exchanges and relevant laws and regulations. To achieve these objectives, HOYA, as a listed company, promptly, precisely and impartially discloses company information to help investors make appropriate investment decisions. A further aim is to increase understanding of HOYA among shareholders, investors and other stakeholders and to contribute to appropriate assessments.
HOYA discloses information that is required to be disclosed as a publicly-held corporation listed on the Tokyo Stock Exchange, Inc. (“TSE”) pursuant to the Rules on Timely Disclosure of Corporate Information by Issuers of Listed Securities and the Like (“Timely Disclosure Rules”) prescribed by the TSE, the Financial Instruments and Exchange Law and other relevant laws, ordinances and regulations.
Further, as a global enterprise which operates throughout the world, HOYA shall respect the spirit of Regulation Fair Disclosure, officially adopted by the US Securities and Exchange Commission (SEC) for American companies, prohibit selective disclosure and strive to disclose information impartially.
HOYA announces financial results quarterly. Information pertinent to the Timely Disclosure Rules shall be disclosed via the timely disclosure information transmission system (TDnet) provided by the TSE in compliance with those rules.
Information released via the TDnet shall be promptly posted on the Company´s website subsequent to TDnet disclosure. Information not pertinent to the Timely Disclosure Rules shall be disclosed on the Company´s website.
Release via TDnet is one method of publicly disclosing information under insider trading restrictions. When company information subject to timely disclosure rules is posted on the TSE website (an internet access service for the timely disclosure of information to news media via TDnet and which is also accessible to the general public), the insider trading restrictions for public disclosure of information are fulfilled. The Company will disclose via TDnet as well as the Company´s website information that is considered to have a material impact on investors in making investment decisions.
A period of silence is maintained beginning approximately one month prior to the date of announcement of financial results each quarter until the time of the announcement in order to prevent the divulgence of financial results information and ensure impartiality. During this period, HOYA shall refrain from responding to questions and making comments regarding account settlements. In addition, meetings with analysts and investors and other contacts are also avoided regardless of their purposes. However, announcements shall be made appropriately in line with the disclosure rules if the content of financial results that is revealed during this period deviate significantly from already announced earnings´ forecasts, if the degree of fluctuation is revealed to be pertinent to the Timely Disclosure Rules, etc.
A period of silence is maintained beginning approximately one month prior to the date of announcement of financial results each quarter until the time of the announcement in order to prevent the divulgence of financial results information and to ensure impartiality. During this period, HOYA shall refrain from responding to questions and making comments regarding account settlements. In addition, meetings with analysts and investors and other contacts shall also be avoided regardless of the purpose. However, announcements shall be made appropriately in line with the disclosure rules if the contents of financial results that are revealed during this period deviate significantly from already announced earnings forecasts, if the degree of fluctuation is revealed to be pertinent to the Timely Disclosure Rules, etc.
HOYA may make comments and disclose information which include forward-looking statements with respect to HOYA´s plans and future performance. Such forward-looking statements that are not historical fact are based on management´s assumptions and beliefs in light of the information available to it when such statements were prepared. We do not guarantee the accuracy or completeness of the information herein. HOYA cautions that a number of factors could cause actual results to differ materially from those discussed in the forward-looking statements. Such factors include but are not limited to fluctuation of exchange rates and interest rates, international situations, market trends and economic conditions, competition, production capacity and research and development capabilities and so on. Please refer to Business Risk.
HOYA discloses information fairly and promptly, through TDnet, seminars, telephone conferences, internet, printed matter and so on in order to satisfy accountability to investors as well as to promote better understanding of the Group. The Company shortened the period between the end of each quarter and the disclosure for a prompt disclosure. Also CEO attends investor and analyst meetings that are held on the day of financial announcement each quarter to discuss quarterly financial reports, where he explains strategy and fields questions. The Company devotes additional energies to interaction with individual shareholders and investors through such efforts as holding seminars across Japan and also for the convenience of shareholders the Company holds the General Shareholders´ Meeting early, avoiding those days on which many such shareholders´ meetings are usually held. The Company consider interactive communication as importance to establish trustful relations with not only investors and analysts in financial markets but also all other stakeholders through proactive IR activities.
The main items believed to be potential risk factors for development of the businesses of the Hoya Group are described below. Matters concerning forward-looking activities included in these statements are based on information evaluated by Hoya´s management as of the date these materials were prepared.
Hoya has a small group of three executive officers, including two directors who serve concurrently as executive officers, in order to enhance management efficiency and accelerate decision-making. These executive officers play an important role in formulating and deciding overall Group management policies and management and business strategies, establishing new businesses and promoting operations. To ensure that the Group does not rely excessively on these officers, Hoya works to reduce management risk by putting in place management systems, and is strengthening human resources development in all business areas. Nevertheless, the Group does rely on these officers to a great degree, and if these individuals were suddenly unable to serve as senior managers for whatever reason, the Group´s performance and future business development could be affected.
As the Hoya Group develops its business on a global scale, the currencies of those countries in which the Hoya Group has major manufacturing operations appreciate would incur an increase in costs on a consolidated basis. If the currencies of those countries in which the Hoya Group has major sales operations depreciate, it would bring about a decrease in sales.
In the event that the future movement of people, goods or money were to be extraordinarily restrained in certain regions, or if certain unexpected events took place in those countries in which the Hoya Group has business operations - including changes in the political, economic or legal environments, labor shortages, strikes, accidents or natural calamities, etc. - certain problems may arise in the execution of business operations.
Every part of the Electro-Optics product range, which constitutes a major portion of Hoya Group revenue, involves intermediate production goods, components or materials. Therefore, sales of the business thereof is affected by the market conditions of such end-consumer products such as personal computers and digital home appliances that are manufactured utilizing the resultant products.
In recent years, discount shops of an unprecedented type have emerged and brought about a lowering of prices. If the influence of such discount shops swells to an extent that cannot be absorbed by the Hoya Group´s cost reduction efforts and strategies for adding high value both in Japan and abroad, the business results and financial condition of the Hoya Group might be adversely affected.
The Hoya Group strives at all times to develop state-of-the-art technologies. However, if the Hoya Group fails to sufficiently predict changes in the sector and markets or to develop new products that meet customer needs in time, the business results and financial condition of Hoya Group might be adversely affected.
The Hoya Group, which has the top market share for its many products in their respective sectors, is constantly exposed to relentless competition. There is no guarantee that the Hoya Group can maintain its overwhelming market share and compete efficiently in future. If customers shift allegiance due to cost pressures or inefficiency of Hoya´s competitiveness, the business results and financial condition of Hoya Group might be adversely affected.
At present, the Hoya Group reinforces its production capacity so as to meet orders that exceed existing production capacity in multiple business areas. However, if the setting 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., and adversely affect the business results and financial condition of the Hoya Group.
New business is important for future growth. In the event that no promising new business is developed, the growth of the Hoya Group might not be achieved as planned. Besides, the Hoya Group may carry out mergers and acquisitions as a part of its business strategy. If unexpected obstacles emerge after such acquisition and unscheduled time and costs are required, the business results and financial condition of the Hoya Group might be adversely affected.
In the course of its operations, the Hoya Group retains a substantial amount of personal and confidential information, and the Group has numerous measures in place to manage this information. Nevertheless, in the unlikely event that an outflow of information were to occur, the Hoya Group could experience a loss of trust from society and face liability for damages.
In its new product development and manufacturing, as well as its sales activities, the Hoya Group conducts thorough advance research to avoid infringing upon other companies´ intellectual property rights. Nevertheless, these efforts cannot eliminate the risk of a third party asserting infringement of their intellectual property rights. In such an event, in addition to legal costs and depending on the outcome of litigation, the Hoya Group might be unable to take advantage of said technology and could be liable for damage compensation payments.
The Hoya Group manufactures a wide variety of products according to stringent quality standards. However, if a quality issue were to arise which necessitated a recall or resulted in product liability, in addition to the cost of collecting such products, the Group could also incur significant damage to its reputation with customers. Also, depending on the product, the Group could be liable for damage compensation payments.
Please note that in April 2015, the U.S. Department of Justice issued a subpoena to PENTAX of America, Inc., a U.S. subsidiary of ours (“PENTAX”). The subpoena seeks information with respect to duodenoscopes that PENTAX and its affiliates manufactures, distributes and sells. PENTAX is cooperating with the Department of Justice and is in the process of responding to the subpoena. Depending on the developments in this matter, results of operations and the financial condition of the HOYA Group may be adversely affected.
The ongoing growth of the Hoya Group is largely dependent on its ability to retain and train superior personnel in a wide range of fields. However, the Hoya Group's growth and operating performance could be negatively affected if the swiftly diversifying employment environment resulted in a situation that halted the flow of capable human resources or impeded the recruiting and training of new personnel.
Some of the raw materials and parts the Hoya Group uses in its manufacturing activities are of a specialty nature, such that suppliers are limited, so the selection of alternative suppliers would be problematic. Therefore, a natural calamity or 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 and financial position.
The Hoya Group believes that management´s responsibility is not to create 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 to occur nevertheless, the Hoya Group´s operating performance and financial condition could be negatively affected.
The corporations belonging to the HOYA Group calculate their tax obligations in accordance with the tax laws of the countries where they engage in business activities and pay their obligations properly. HOYA Group companies pay close attention to issues related to international tax risk, including regulations regarding transfer pricing, but there is a possibility that additional taxes may be due owing to differences of opinion.