Pentax 2003 Annual Report Download - page 45

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recognized as either assets or liabilities and measured at fair value,
and gains or losses on derivative transactions are recognized in
the statements of income and (b) for derivatives used for
hedging purposes, if derivatives qualify for hedge accounting
because of high correlation and effectiveness between the
hedging instruments and the hedged items, gains or losses on
derivatives are deferred until maturity of the hedged transac-
tions.
The foreign exchange forward contracts employed to hedge
foreign exchange exposures for export sales are measured at the
fair value and the unrealized gains/losses are recognized in
income. Forward contracts applied for forecasted (or commit-
ted) transactions are also measured at the fair value but the
unrealized gains/losses are deferred until the underlying transac-
tions are completed.
Long-term debt denominated in foreign currencies for which
foreign exchange forward contracts are used to hedge the foreign
currency fluctuations are translated at the contracted rate if the
forward contracts qualify for hedge accounting.
The interest rate swaps which qualify for hedge accounting
and meet specific matching criteria are not remeasured at market
value but the differential paid or received under the swap
agreements are recognized and included in interest expenses or
income.
o. Per Share Information
Effective April 1, 2002, the Company adopted a new accounting
standard for earnings per share of common stock issued by the
Accounting Standards Board of Japan. Under the new standard,
basic net income per share is computed by dividing net income
available to common shareholders, which is more precisely computed
than under previous practices, by the weighted-average number of
common shares outstanding for the period, retroactively adjusted for
stock splits.
Diluted net income per share reflects the potential dilution that
could occur if the outstanding stock options were exercised into
common stock. Diluted net income per share of common stock
assumes full exercise of the outstanding stock options at the begin-
ning of the year (or at the time of grant). Basic net income and
diluted net income per share for the years ended March 31, 2003,
2002 and 2001 are computed in accordance with the new standard.
Cash dividends per share presented in the accompanying consoli-
dated statements of income are dividends applicable to the respective
years including dividends to be paid after the end of the year.
No»3REORGANIZATION
(i) Reorganization of Subsidiaries to the Company’s Branches
On April 1, 2000, the Company purchased ORI Group which
consisted of 11 companies in the United States for ¥15,896
million and on October 31, 2000, Midwest Optical Laborato-
ries, Inc. (“MOL”) for ¥513 million. ORI Group, MOL and a
newly established American company consisted of Hoya Optical
Laboratories, Inc. (“HOL”) and 12 consolidated subsidiaries,
which had been wholly owned American subsidiaries of HOL.
On March 1, 2001, the Company reorganized HOL and the
12 consolidated subsidiaries to the Company’s branches. Due to
the reorganization, goodwill of ¥15,167 million was recorded and
subsequently ¥14,347 million was charged to income. Also an
adjustment of retained earnings for the reorganization of consoli-
dated subsidiaries to branches was recorded in the amount of
¥820 million as an adjustment to income from April 1, 2000 to
February 28, 2001 for HOL and subsidiaries.
(ii) Reorganization of Subsidiaries
On September 30, 2001, the Company purchased the minority
interest of Hoya Optikslip AB (“HOSL”) in Sweden for ¥384
million to become a wholly owned consolidated subsidiary.
Previously, HOSL had been accounted for by the equity
method.
On October 1, 2001, Welfare Corporation, which had been a
wholly owned unconsolidated subsidiary of the Company, was
merged into Hoya Healthcare Corporation (“HHC”). On
January 1, 2002, Welfare Corporation was then split up from
HHC.
On February 1, 2002, the Company purchased Eagle Optics,
Inc. in the United States for ¥474 million.
On March 31, 2002, the Company increased its ownership of
Thai Hoya Lens Ltd. to become a consolidated subsidiary, which
had been accounted for by the equity method.
(iii) Merger of the Company with Subsidiaries
On March 1, 2003, the Company purchased Hoya Lens of Chicago,
Inc. in the United States for ¥1,301 million ($10,842 thousand).
On March 1, 2003, the Company merged with Hoya Techno Process
Corporation and two other companies, which had been wholly
owned unconsolidated subsidiaries of the Company.
(iv) Transfer of Business
On March 31, 2003, a part of hearing aid business in Eye-Care field
was transferred to a third party.