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ANNUAL REPORT
For the year ended September 30, 2013
2013
HAMAMATSU PHOTONICS K.K.
ANNUAL REPORT
For the year ended September 30, 2013
2013
ANNUAL REPORT
For the year ended September 30, 2013
2013 Table of contents
FINANCIAL HIGHLIGHTS...2TO OUR SHAREHOLDERS...4DIVISIONAL REVIEW...6RESEARCH & DEVELOPMENT...8TOPICS...10FINANCIAL REVIEW...12FIVE-YEAR SUMMARY...14CONSOLIDATED SUBSIDIARIES...15CONSOLIDATED BALANCE SHEETS...16CONSOLIDATED STATEMENTS OF INCOME...18CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME...18CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS...19CONSOLIDATED STATEMENTS OF CASH FLOWS...20NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...21REPORT OF INDEPENDENT AUDITORS...29DIRECTORS AND CORPORATE AUDITORS...30CORPORATE DATA...31PROFILE OF THE HAMAMATSU FAMILY...32
FINANCIAL HIGHLIGHTS
(*) The U.S. dollar amounts above and elsewhere in this report represent translations, solely for the convenience of the reader, using the exchange rate of Japanese ¥98 = U.S.$1.
Net sales
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Net income
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Return on assets,Return on equity
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(%) ROE ROA
Consolidated:
Millions of Japanese Yen
Thousands of U.S. Dollars (*)
2012 2013 2012 2013
Net sales....................................................................................... ¥ 98,067 ¥ 102,156 $ 1,000,689 $ 1,042,409Operating income ......................................................................... 17,587 16,781 179,463 171,241Income before income taxes and minority interests ..................... 17,812 17,904 181,759 182,694Net income ................................................................................... 11,206 11,529 114,351 117,645
Total assets .................................................................................. 189,970 198,278 1,938,471 2,023,246Net assets..................................................................................... 140,873 154,385 1,437,479 1,575,366
R & D expenses............................................................................ 10,765 10,885 109,855 111,074
Per share data (in Yen and U.S. Dollars)Net income .............................................................................. ¥ 139.39 ¥ 143.41 $ 1.42 $ 1.46Cash dividends ....................................................................... ¥ 46.00 ¥ 50.00 $ 0.46 $ 0.51
2
Non-consolidated:
Millions of Japanese Yen
Thousands of U.S. Dollars (*)
2012 2013 2012 2013
Net sales....................................................................................... ¥ 85,108 ¥ 80,937 $ 868,457 $ 825,896Operating income ......................................................................... 13,682 9,309 139,619 94,994Income before income taxes ........................................................ 15,306 11,696 156,188 119,355Net income ................................................................................... 9,531 8,331 97,262 85,018
Total assets .................................................................................. 174,725 173,354 1,782,910 1,768,926Net assets..................................................................................... 131,347 136,358 1,340,284 1,391,414
R & D expenses............................................................................ 10,517 10,624 107,322 108,413
Per share data (in Yen and U.S. Dollars)Net income .............................................................................. ¥ 118.36 ¥ 103.46 $ 1.20 $ 1.05Cash dividends ....................................................................... ¥ 46.00 ¥ 50.00 $ 0.46 $ 0.51
Net sales
0
25
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Annual Report 2013
3
TO OUR SHAREHOLDERS
Dear Shareholders:
During the fiscal year ended September 30, 2013 (From October
1, 2012 through September 30, 2013), Japan’s economy began
showing signs of recovery as the yen gradually weakened and
stock prices rose, reflecting the sense of anticipation toward
the various economic policies under the new administration
and the Bank of Japan’s monetary easing policy. Nevertheless,
concerns over the slowdown of the economic picture overseas
lingered, and when domestic issues such as manufacturing
sector capital investment, which has yet to recover fully, were
taken into account, the economy as a whole continued to labor
under difficult conditions.
Given such circumstances, our Group under took the
development of new products and capital investment aimed at
continuing to boost production capacity, and strove to ensure
net sales and earnings by further improving the proprietary
optical technologies we have cultivated over many years
and moving forward with development of high-value-added
products that addressed customers’ needs.
For the fiscal year ended September 30, 2013, net sales
increased by JPY 4,088 million (4.2%) compared with the prior
fiscal year to JPY 102,156 million, a result that partially reflected
by the influence of exchange rates. On the other hand, from an
income perspective we reported higher net income but lower
earnings at the operating income stage, and unfortunately
closed the year with operating income of JPY 16,781 million,
down by JPY 805 million (4.6%), and net income of JPY 11,529
million, up by JPY 322 million (2.9%) over one year earlier,
respectively.
4
Akira HirumaPresident and CEODecember 20, 2013
The business environment surrounding our Group reflects the sense of stagnation in the global economy, while the
outlook for the domestic business climate is uncertain despite a heightened sense of anticipation regarding the future.
Given such circumstances, our Group believes that to maintain our growth continuously in the future, it is critical that
we pursue basic research on the fundamental qualities of “light” that have not been yet clarified, and undertake new
product development to take maximum advantage of our state-of-the-art optics technologies that other companies
cannot duplicate.
As a Group we are confident that such aggressive investment for the future will be the wellspring of innovation that
leads to the evolution of our company.
During this year our Group commemorated the 60th anniversary of the company’s founding. We would like to thank all
our shareholders for their support and guidance, without which this would not have been possible. As a Group, we will
not neglect to concentrate on creating innovation as an R&D firm and will strive to remain one of the world’s leading
industrial groups by pursuing the yet unexplored regions of light and creating new industries.
As our Company moves ahead, I look forward to even greater support and encouragement of our activities. Thank you.
Sincerely,
Annual Report 2013
5
DIVISIONAL REVIEW
Electron Tube Division (Electron Tube Segment)
For over 60 years, Hamamatsu Photonics has developed and manufactured photomultiplier tubes. This technology continues to evolve today at the Electron Tube Division, one of the company’s primary manufacturing divisions. The Electron Tube Division also develops and manufactures a variety of products for use in medical applications, chemical analysis, measurement, industrial testing, and academic research. These products include photomultiplier tubes, electron multipliers, microchannel plates, image intensifiers, X-ray products, and a wide variety of light sources. In fiscal year 2013, sales of these products accounted for 42.8% of the company’s total revenue.
Sales of photomultiplier tubes
Sales of photomultiplier tubes (PMT) for oil well logging devices in the measurement market contracted. Nevertheless, sales were also affected positively by the exchange rate, while sales for nuclear medicine testing applications such as Positron Emission Tomography (PET) rose, and sales for specimen material testing equipment including blood analyzers also remained steady, supported by brisk demand. In addition, sales of devices such as laser scanning microscopes, which are highly regarded for their excellent sensitivity, also began contributing to sales.
Sales of imaging devices and light sources
In the imaging devices and light sources segment, demand for UV spot light sources and our Stealth Dicing Engine was negatively impacted by controls on capital investment in the semiconductor industry, which resulted in lower sales. Sales of imaging devices and light sources, however, expanded because of higher sales in the medical field, where sales of scintillators for converting X-rays into visible light were higher, particular in North America where our products have earned a reputation for their high resolution and high quantum efficiency, and as a result of strong sales in the industrial sector of microfocus X-ray sources for non-destructive testing.In total, the Electron Tube business comprised of photomultiplier tubes (PMT) and imaging devices and light sources closed the year with net sales of JPY 43,764 million, up by 3.6% from the previous year.
PMT for TOF-PET
Example of MFX usage
Conveyor
Microfocus X-ray source(MFX)
X-ray line scan camera,X-ray TDI camera
6
Solid State Division (Opto-semiconductor Segment)
The Solid State Division develops and manufactures opto-semiconductors for demanding applications in medical imaging, high-energy physics, and scientific measurement. Products from this division include silicon photodiodes, photo IC components, position sensitive detectors, infrared detectors, image sensors for low-light-level imaging and X-ray imaging, mini-spectrometers, and light emitting devices. In fiscal year 2013, sales of these products accounted for 41.3% of the company’s total revenue.
Sales of opto-semiconductors
In opto-semiconductors, our flat panel sensors enjoy a strong reputation for features such as high resolution, and sales for dental CT in particular were higher. Vehicle distance sensor products that we developed to meet customers’ needs also began contributing to sales. In silicon photodiodes, however, a key product, sales struggled to grow, partly because of increasingly severe competition in the medical field, while in photo ICs as well, sales for the consumer sector decreased.As a result, net sales in the Opto-semiconductor business came to JPY 42,176 million, down by 0.1% from the previous year.
Systems Division (Imaging and measurement instruments Segment)
The Systems Division develops and manufactures a wide variety of cameras for scientific and industrial applications, as well as specialized instruments for use in fields such as pharmaceutical development, semiconductor manufacturing, X-ray nondestructive inspection, spectrophotometry, and optical communications. In fiscal year 2013, sales of these products accounted for 13.0% of the company’s total revenue.
Sales of image processing and measurement systems
In image processing and measurement systems, sales of drug screening systems used for purposes such as drug discovery were lackluster, but digital cameras were positively evaluated for superb performance that answered
customer needs, while devices such as DNA sequencers enjoyed strong sales in the biotechnology and other sectors. In addition, sales of failure analysis systems for semiconductor manufacturing were pushed higher by increased demand for inspections of power devices installed in vehicles. Supported by these positive factors, sales of image processing and measurement systems increased.As a result, net sales for the Imaging and Measurement Instruments sector were JPY 13,240 million, up by 20.5% over the previous year.
Flat panel sensor for dental X-ray imaging
Semiconductor FA system & sample image
Failure location
Annual Report 2013
7
RESEARCH & DEVELOPMENT
With decades of accumulated expertise in the development of photonic technologies to rely upon, Hamamatsu Photonics conducts basic research to discover new knowledge and create new industries in the fields of biotechnology, medicine, information technology, communications, energy, materials, astronomy, and agriculture. We also strive to continuously develop exciting new products and enhance existing products with added functionality. In fiscal year 2013, funds allocated to research and development totaled ¥10,885 million, an increase of 1.1% over the previous fiscal year. Some highlights of our R&D efforts are presented here.
Basic research
Next-generation PET diagnostic system
In the medical care sector, we successfully established a next-generation PET diagnostic system that can clarify brain conditions such as Alzheimer’s disease that can be tied to precise treatment(*1).Because the diagnosis of Alzheimer’s disease and manic depression required patients to remain stationary for an extended period of time, measurement accuracy was difficult for patients with severe conditions. Using this latest research, changes in the cognition functions in the brain can be captured. Together with developing the PET labeling agent, we developed a PET device for the cephalic region that can make highly accurate measurements of brain functions while correcting the image even if the patient is not completely stationary during the measurement. Development of this next-generation PET diagnostic system has made possible objective evaluations of the effectiveness of anti-dementia drugs, which is expected to contribute to the development of diagnostic procedures and treatments for illnesses such as Alzheimer’s disease and help to illuminate neuropsychiatric disorders.In the life sciences sector, we successfully achieved three-dimensional imaging of iPS cells using reflection-type quantitative phase microscopy. To cultivate iPS cells, change them into somatic cells and transplant them into the human body, the quality during the culture phase must be maintained at the optimal condition. Because using our reflection-type quantitative phase microscopy makes it possible to observe iPS cells with a high degree of resolution in their live state without having to dye them, this product is well suited for assessing the quality of difficult to cultivate iPS cells. The product is expected to contribute to future developments in regenerative medicine.
(*1)PartofthisdevelopmentwasundertakenthroughjointresearchwiththeHamamatsuUniversitySchoolofMedicineunderthe“DevelopmentoftheNextGenerationPETDiagnosticSystemContributingtotheTreatmentofBrainDiseases”projectsponsoredbyNEDO.
Succeeded in the practical application of a portable Compton camera images of gamma radiation
As R&D on radiation measurement, we succeeded in the practical application of a portable Compton camera for capturing images of gamma radiation(*2). By adopting our proprietary high-sensitivity semiconductor photon detector element and high-density scintillators(*3) that offer a high level of luminescence properties, the Compton camera we developed through this project achieved a smaller size, lighter weight (one-fourth the weight of conventional models) and substantial price reduction while providing a high degree of sensitivity. The camera also enables imaging of accumulations of radioactive substances (hot spots) in just a few minutes. This product is expected to contribute to more efficient radioactive material decontamination work.
(*2)PartofthisdevelopmentwasundertakenthroughjointresearchwithWasedaUniversityunderaprojectfor“DevelopmentofanInnovative,HighSensitivityPortableGammaRadiationVisualizationSystem”sponsoredbyJST.
(*3)Scintillatorsareelementsthatconvertradiationintovisiblelight.
Newly-developed brain PET scanner
Compton camera for gamma radiation imaging
8
Product development
Development of the CCD image sensors installed in the Subaru telescope prime focus camera
In collaboration with the National Astronomical Observatory, Osaka University and Kyoto University, we developed the wide-field CCD image sensors installed in the Hyper Suprime-Cam prime focus camera for the Subaru telescope(*4). Sensors used for celestial observations are required to be highly sensitive and have an ultra-wide field of view in the near-infrared light region. By making the CCD silicon layer thicker and using a crystallographic structure to which high voltage can be applied, this product improved sensitivity in the near-infrared light region and suppressed deterioration of the resolution. Furthermore, by using our mass production and assembly technologies to successfully manufacture uniform, high-quality, large area CCDs, and arranging the CCDs as a tile to eliminate the need for a frame to support the thin film portion, we achieved a wide field of view. This CCD technology is expected to be developed for uses such as soft X-ray direct detectors and Raman spectroscopic analysis and is expected to find application in sectors such as soft X-rays, near-infrared light and electron beams in the future.
(*4)The Subaru telescope is an optical-infrared telescope operated by the NationalInstitutesofNaturalSciences’NationalAstronomicalObservatoryofJapanat itsobservationbasefacilityinHawaii.
The Hyper-Suprime Cam incorporates 116 CCD image sensors from Hamamatsu Photonics.
Subaru telescope[Photo credit: National Astronomical Observatory of Japan]
Prime focus camera
Annual Report 2013
9
Photon Fair 2013 technology exhibition
To celebrate the 60th year of the founding of Hamamatsu Photonics, in November a three-day exhibit showcasing the company’s wide array of new products and technologies was held in Hamamatsu City. The theme for the exhibit was “What can we do with light?” Over 7,600 people visited the exhibition and learned about the limitless possibilities of light, as well as hear about the company’s research and also our vision for the future. Attendance was the highest ever for a Photon Fair, and there were many promising discussions for new business.
Construction of two new facilities
At the Toyooka Factory, the primary location of Electron Tube Division, construction was started on a new building at which manufacturing lines for head-on photomultiplier tubes will be consolidated, thus increasing efficiency. The new building will also be used for new product development and for the manufacture of PMTs for particle physics experiments such as neutrino detection.
At the Ichino Factory, construction began on the Solid State Division’s new facility for the development and mass production of MOEMS-based opto-semiconductor devices and modules. Products to be made here will be for automotive use, smartphones, and various other applications that require compact, high-performance detectors.
Exterior rendering of new Toyooka building Rendering of new building at Ichino (plus two existing buildings)
* MOEMSreferstothefusionofelectrontubeoropto-semiconductordevicetechnologytoextremelysmall3Dmechanicaldeviceswhicharefabricatedthroughsemiconductormanufacturingtechniques.
TOPICS
Final day was open to the general public
Entry area of the exhibit
10
Contribution to the Nobel Prize in Physics 2013
On October 8, 2013, the Nobel Prize in Physics was awarded to Peter Higgs and Francois Englert for postulating the Higgs particle to explain why some fundamental particles have mass. Observation of this elusive particle had been announced in 2012 by CERN, home of the Large Hadron Collider (LHC) facility where hundreds of Hamamatsu detectors are used.
At the LHC facility, protons are accelerated around a 27-kilometer ring to produce extremely high energies when they collide into each other. Under these conditions, thought to be similar to those at the time of the Big Bang, such collisions generate exotic particles for detection by ATLAS, CMS, and the facility’s several other advanced detection systems. Existence of the Higgs particle was verified through measurements made by particle trackers and calorimeters within ATLAS and CMS. Both these types of detectors included Hamamatsu devices at their core: the particle trackers have silicon strip detectors (SSD)(*1), while the calorimeters use either photomultiplier tubes (ATLAS) or avalanche photodiodes (CMS).
Hamamatsu is proud of the contribution our technology makes to such important research efforts in fundamental physics. Nearly all of the solid state detectors used at the LHC facility are manufactured by Hamamatsu, and our photomultiplier tubes can be found in all of CERN’s detection systems, including ALICE and LHCb.
(*1)Silicon strip detectors (SSD) are large area detector elements composed of hundredsofchannelsofextremelyfinestripe-shapedphotodiodes.Theyareused topinpoint thelocationofsecondaryparticularswithintensofmicrons.
Internal view of CMS (photo courtesy of CERN)
Silicon strip detector used in CMS
PMTs used in Large Hadron Collider
Annual Report 2013
11
FINANCIAL REVIEW
Net salesDuring the fiscal year ended September 30, 2013 (From Oct. 1, 2012 through Sep. 30, 2013), Japan’s economy began showing signs of recovery as the yen gradually weakened and stock prices rose. This reflects a sense of anticipation toward the various economic policies under the new administration and the Bank of Japan’s monetary easing policy. Nevertheless, concerns over the slowdown of the economic picture overseas lingered. When domestic issues such as manufacturing sector capital investment, which has yet to recover fully, were taken into account, the economy as a whole continued to labor under difficult conditions. As a result, consolidated net sales for the fiscal year ended September 30, 2013 were JPY 102,156 million (US$ 1,042,409 thousand), up by 4.2% or JPY 4,088 million (US$ 41,720 thousand) over the previous year. Sales in the Electron Tube segment including Photomultiplier Tubes, Imaging Devices and Light Sources amounted JPY 43,764 million (US$ 446,572 thousand), a 3.6% increase by JPY 1,518 million (US$ 15,491 thousand) the previous year. Sales of Opto-semiconductor was JPY 42,176 million (US$ 430,370 thousand), down by 0.1% or JPY 52 million (US$ 536 thousand) over the previous year. Sales of the Imaging and Measurement Instruments segment including Image Processing and Measurement Systems increased 20.5% to JPY 13,240 million (US$ 135,105 thousand). Net sales from other business, mainly semiconductor laser business and hotel operations, were JPY 2,975 million (US$ 30,361 thousand), up by 14.0% over last year.
Operating incomeCost of sales increased 6.5% or JPY 3,115 million (US$ 31,787 thousand) over the previous year to JPY 50,951 million (US$ 519,915 thousand). The cost of sales ratio weakened 1.1 points to 49.9% this year. Selling, general and administrative expenses were JPY 23,537 million (US$ 240,178 thousand), up by 7.6%, JPY 1,659 million (US$ 16,935 thousand). Research and development expenses were JPY 10,885 million (US$ 111,074 thousand), up by 1.1% from previous year. As a result, operating income was JPY 16,781 million (US$ 171,241 thousand), down by 4.6%. Operating income for Electron tube, Opto-semiconductor and Imaging and measurement instruments business segment was JPY 16,040 million (US$ 163,681 thousand), down by 1.1%, JPY 12,406 million (US$ 126,593 thousand), down by 11.6% and JPY 1,584 million (US$ 16,166 thousand), up by 169.9%, respectively. Other business recorded an operating income of JPY 153 million (US$ 1,570 thousand).
Net incomeOther income, on net basis, was JPY 1,122 million (US$ 11,453 thousand), compared with JPY 225 million (US$ 2,296 thousand) net of other income for the previous year. Reflecting the previously cited factors, net income for the fiscal year ended September 30, 2013 was up by 2.9% to JPY 11,529 million (US$ 117,645 thousand) from JPY 11,206 million (US$ 114,351 thousand). Consequently, basic net income per share increased from JPY 139.39 (US$ 1.42) to JPY 143.41 (US$ 1.46). Dividend per share applicable to the fiscal year was JPY 50 (US$ 0.51).
Net sales
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Operating income
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12
Financial positionCurrent assets increased 4.6% to JPY 132,795 million (US$ 1,355,054 thousand). This mainly reflected increases in cash and deposits, notes and accounts receivable-trade and inventories. Property, plant and equipment increased from JPY 51,359 million (US$ 524,076 thousand) to JPY 53,541 million (US$ 546,344 thousand) due mainly to an increase in property, plant and equipment. Investments and other assets were JPY 11,941 million (US$ 121,848 thousand), up by 2.8% or JPY 327 million (US$ 3,338 thousand). Total Assets at the end of fiscal year 2013 were JPY 198,278 million (US$ 2,023,246 thousand), up by JPY 8,307 million (US$ 84,775 thousand). Current liabilities decreased from JPY 29,669 million (US$ 302,754 thousand) to JPY 27,277 million (US$ 278,341 thousand). Although notes payable-facilities increased, current liabilities were lower mainly because of a decrease in the current portion of long-term loans payable. Noncurrent liabilities decreased from JPY 19,427 million (US$ 198,237 thousand) to JPY 16,614 million (US$ 169,539 thousand) due mainly to a decrease in the provision for retirement benefits that was the result of contributing to the retirement benefit trust. Total liabilities for the fiscal year ended September 30, 2013 were JPY 43,892 million (US$ 447,880 thousand), down by 10.6%. Net Assets were JPY 154,385 million (US$ 1,575,366 thousand), up by 9.6% or JPY 13,512 million (US$ 137,886 thousand) over previous year. The net assets ratio was 77.9%, compared to 74.2% at a year before.
Cash flowsAt the end of this fiscal year, cash and cash equivalent stood at JPY 42,852 million (US$ 437,266 thousand), up by JPY 7,087 million (US$ 72,319 thousand) from the end of the previous fiscal year. Net cash provided by operations for the period was JPY 14,688 million (US$ 149,886 thousand), down by JPY 250 million (US$ 2,556 thousand) over last year. This is mainly from a decrease in provision for retirement benefits. Investment activity required a cash flow of JPY 6,493 million (US$ 66,259 thousand), down by JPY 2,307 million (US$ 23,545 thousand) from previous year due mainly to a decrease in proceeds from sales of short-term investment securities. Financial activity required cash flow by JPY 4,052 million (US$ 41,350 thousand) due mainly to a shift in short-term loans payable from a net increase in the previous year because of borrowings to a net decrease that reflected repayments.
Capital expendituresCapital expenditures during fiscal year 2013 totaled JPY 9,184 million (US$ 93,721 thousand), 6.4% or JPY 551 million (US$ 5,622 thousand) higher than previous fiscal year. Capital expenditures for the Electron tube segment were JPY 2,866 million (US$ 29,249 thousand), mainly for expanding and improving manufacturing, research and development facilities. In the Opto-semiconductor segment, major investments were made in expanding and improving manufacturing, research and development facilities. Total investment for this segment amounted to JPY 3,367 million (US$ 34,358 thousand) for the fiscal year. Investments in Imaging and Measurement Instrument segment were JPY 296 million (US$ 3,028 thousand), mainly for expanding and improving the manufacturing, research and development facilities. There was no major sale or disposal of material fixed assets during this fiscal year.
R&D expenses
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Total assets Net assets
Annual Report 2013
13
FIVE-YEAR SUMMARY
HamamatsuPhotonicsK.K.andConsolidatedSubsidiariesYearsendedSeptember30
Millions of Japanese Yen2009 2010 2011 2012 2013
For the year:Net sales ....................................................... ¥ 71,976 ¥ 90,958 ¥ 101,858 ¥ 98,067 ¥ 102,156Operating income .......................................... 3,741 15,751 21,830 17,587 16,781Income before income taxes
and minority interests ............................... 3,333 16,145 21,719 17,812 17,904Net income .................................................... 1,791 11,491 13,702 11,206 11,529
Capital expenditures ...................................... 9,431 9,236 7,348 8,633 9,184Depreciation .................................................. 9,501 8,354 7,750 8,223 7,769R&D expenses .............................................. 9,520 9,550 10,081 10,765 10,885
At year-end:Working capital .............................................. ¥ 67,712 ¥ 81,318 ¥ 91,843 ¥ 97,326 ¥ 105,517Total assets ................................................... 158,026 176,407 188,091 189,970 198,278Common stock .............................................. 34,928 34,928 34,928 34,928 34,928Net assets ..................................................... 117,452 124,481 133,434 140,873 154,385
Number of shares issued (thousands) .......... 83,764 83,764 83,764 83,764 83,764Number of employees ................................... 3,793 4,002 4,188 4,386 4,415
Japanese YenPer share data:
Net incomeBasic......................................................... ¥ 22.29 ¥ 142.93 ¥ 170.44 ¥ 139.39 ¥ 143.41Diluted ...................................................... 22.12 - - - -
Cash dividends .............................................. 30.00 40.00 44.00 46.00 50.00Net assets ..................................................... 1,441.44 1,539.16 1,650.23 1,745.18 1,913.98
PercentRatios:
Equity ratio .................................................... 73.3 70.1 70.5 73.9 77.6Return on net sales ....................................... 2.5 12.6 13.5 11.4 11.3Return on assets ........................................... 1.1 6.9 7.5 5.9 5.9Return on equity ............................................ 1.5 9.6 10.7 8.2 7.8
14
Japan
Takaoka Electronics Co., Ltd. Hamamatsu City, Shizuoka Pref., Japan Koso Corporation Iwata City, Shizuoka Pref., Japan Hamamatsu Electronic Press Co., Ltd. Iwata City, Shizuoka Pref., Japan Iwata Grand Hotel Inc. Iwata City, Shizuoka Pref., Japan China Healthcare K.K. Hamamatsu City, Shizuoka Pref., Japan
China
Hamamatsu Photonics (China) Co., Ltd. Beijing, China Beijing Hamamatsu Photon Techniques, Inc. Beijing, China Hangzhou Hamamatsu Photonics Science and Technology Co., Ltd. Hangzhou, Zhejiang, China
U.S.A.
Photonics Management Corp. Bridgewater, New Jersey, U.S.A. Hamamatsu Corporation Bridgewater, New Jersey, U.S.A. Universal Spectrum Corporation Middlesex, New Jersey, U.S.A.
Europe
Hamamatsu Photonics Europe GmbH Herrsching, Germany Hamamatsu Photonics Deutschland GmbH Herrsching, Germany Hamamatsu Photonics France S.A.R.L. Massy Cedex, France Hamamatsu Photonics UK Limited Welwyn Garden City, United Kingdom Hamamatsu Photonics Norden AB Kista, Sweden Hamamatsu Photonics Italia S.r.l. Arese, Italy
CONSOLIDATED SUBSIDIARIES Annual Report 2013
15
CONSOLIDATED BALANCE SHEETS
HamamatsuPhotonicsK.K.andConsolidatedSubsidiariesAsofSeptember30,2012and2013
ASSETSMillions of
Japanese YenThousands of
U.S. Dollars (Note 1)
2012 2013 2012 2013
Current assets:Cash and deposits ................................................................ ¥ 74,559 ¥ 78,603 $ 760,811 $ 802,077Receivables:
Notes and accounts receivable-trade .............................. 23,469 24,183 239,487 246,767Less: Allowance for doubtful accounts ............................ (134) (158) (1,377) (1,616)
Inventories:Merchandise and finished goods .................................... 6,446 6,277 65,777 64,052Work in process .............................................................. 12,430 12,977 126,839 132,425Raw materials and supplies ............................................ 5,478 5,849 55,900 59,693
Other ..................................................................................... 1,684 2,064 17,189 21,062Deferred tax assets (Note 7) ................................................. 3,063 2,998 31,255 30,592
126,996 132,795 1,295,884 1,355,054
Property, plant and equipment (Note 4):Land ...................................................................................... 15,149 15,822 154,589 161,455Buildings and structures ....................................................... 55,018 56,757 561,411 579,156Machinery, equipments and vehicles .................................... 87,120 91,887 888,982 937,627Construction in progress ....................................................... 2,831 4,831 28,890 49,305
160,119 169,299 1,633,873 1,727,545Less: Accumulated depreciation ........................................... (108,760) (115,757) (1,109,796) (1,181,201)
51,359 53,541 524,076 546,344
Investments and other assets:Investment securities (Note 5) .............................................. 1,237 1,658 12,628 16,923Investments in and advances to non-consolidated
subsidiaries and affiliates ................................................ 837 860 8,543 8,784Other ..................................................................................... 3,166 3,204 32,315 32,697Deferred tax assets (Note 7) ................................................. 6,372 6,217 65,022 63,442
11,613 11,941 118,509 121,848
¥ 189,970 ¥ 198,278 $ 1,938,471 $ 2,023,246
SeeNotestoConsolidatedFinancialStatements.
16
LIABILITIES AND NET ASSETSMillions of
Japanese YenThousands of
U.S. Dollars (Note 1)
2012 2013 2012 2013
Current liabilities:Short-term loans payable (Note 4) ........................................ ¥ 1,345 ¥ 1,380 $ 13,726 $ 14,086Current portion of long-term loans payable (Note 4) ............ 3,290 186 33,575 1,900Payables:
Notes and accounts payable-trade ................................. 11,657 11,184 118,957 114,129Construction and other .................................................... 4,178 4,791 42,639 48,890
Income taxes payable (Note 7) ............................................. 1,321 1,418 13,487 14,475Accrued expenses ................................................................ 5,084 5,517 51,885 56,303Other ..................................................................................... 2,791 2,798 28,481 28,555
29,669 27,277 302,754 278,341
Noncurrent liabilities:Long-term loans payable (Note 4) ........................................ 4,123 7,084 42,075 72,289Provision for retirement benefits (Note 6) ............................. 13,371 7,609 136,441 77,647Other ..................................................................................... 1,766 1,701 18,023 17,359Deferred tax liabilities (Note 7) ............................................. 166 219 1,697 2,243
19,427 16,614 198,237 169,539
Net assets:Shareholders’ equity
Capital stock, no par value: ............................................. 34,928 34,928 356,414 356,414Authorized - 250,000,000 sharesIssued - 83,764,984 shares in 2012 - 83,764,984 shares in 2013
Capital surplus ................................................................ 34,672 34,672 353,801 353,801Retained earnings (Note 9) ............................................. 82,484 90,309 841,683 921,528Less: Treasury stock ....................................................... (6,048) (6,048) (61,715) (61,721)
Accumulated other comprehensive incomeValuation difference on available-for-sale securities ....... 157 541 1,609 5,526Foreign currency translation adjustment ......................... (5,892) (530) (60,124) (5,410)
Minority interests ................................................................... 569 512 5,810 5,225140,873 154,385 1,437,479 1,575,366
¥ 189,970 ¥ 198,278 $ 1,938,471 $ 2,023,246
SeeNotestoConsolidatedFinancialStatements.
Annual Report 2013
17
CONSOLIDATED STATEMENTS OF INCOME
HamamatsuPhotonicsK.K.andConsolidatedSubsidiariesYearendedSeptember30,2012and2013 Millions of
Japanese YenThousands of
U.S. Dollars (Note 1)2012 2013 2012 2013
Net sales ................................................................................................. ¥ 98,067 ¥ 102,156 $ 1,000,689 $ 1,042,409
Operating costs and expenses:Cost of sales ..................................................................................... 47,836 50,951 488,127 519,915Selling, general and administrative expenses ................................... 21,877 23,537 223,242 240,178Research and development expenses .............................................. 10,765 10,885 109,855 111,074
Operating income .................................................................................. 17,587 16,781 179,463 171,241
Other income (expenses):Interest and dividend income ............................................................ 198 206 2,024 2,111Interest expenses .............................................................................. (115) (104) (1,181) (1,071)Other, net .......................................................................................... 142 1,020 1,453 10,413
Income before income taxes and minority interests.......................... 17,812 17,904 181,759 182,694
Income taxes (Note 7)Current .............................................................................................. 5,702 6,027 58,185 61,507Deferred ............................................................................................ 1,067 340 10,891 3,477
6,769 6,368 69,077 64,985
Income before minority interests ......................................................... 11,042 11,535 112,681 117,709
Minority interests in income ................................................................. 163 (6) 1,669 (64)
Net income ............................................................................................. ¥ 11,206 ¥ 11,529 $ 114,351 $ 117,645
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Note 3)
HamamatsuPhotonicsK.K.andConsolidatedSubsidiariesYearendedSeptember30,2012and2013 Millions of
Japanese YenThousands of
U.S. Dollars (Note 1)2012 2013 2012 2013
Income before minority interests .......................................................... ¥ 11,042 ¥ 11,535 $ 112,681 $ 117,709
Other comprehensive incomeValuation difference on available-for-sale securities .......................... (5) 383 (54) 3,917Foreign currency translation adjustment ............................................ 62 5,364 636 54,743Share of other comprehensive income of associates
accounted for using equity method .............................................. (3) 73 (31) 749Total other comprehensive income .................................................... 54 5,822 551 59,410
Comprehensive income ......................................................................... ¥ 11,096 ¥ 17,357 $ 113,233 $ 177,119
Comprehensive income attributable toComprehensive income attributable to owners of the parent ............. ¥ 11,257 ¥ 17,275 $ 114,871 $ 176,276Comprehensive income attributable to minority interests .................. (160) 82 (1,637) 842
Japanese Yen U.S. Dollars (Note 1)2012 2013 2012 2013
Per share of common stock:Net income ........................................................................................ ¥ 139.39 ¥ 143.41 $ 1.42 $ 1.46Cash dividends applicable to the year .............................................. 46.00 50.00 0.46 0.51
SeeNotestoConsolidatedFinancialStatements.
18
HamamatsuPhotonicsK.K.andConsolidatedSubsidiariesYearendedSeptember30,2012and2013
Millions ofJapanese Yen
Thousands ofU.S. Dollars (Note 1)
2012 2013 2012 2013
Capital stock:Balance at the beginning of current period ........................... ¥ 34,928 ¥ 34,928 $ 356,414 $ 356,414Total changes of items during the period .............................. - - - -Balance at the end of current period ..................................... 34,928 34,928 356,414 356,414
Capital surplus:Balance at the beginning of current period ........................... 34,672 34,672 353,801 353,801Total changes of items during the period .............................. - - - -Balance at the end of current period ..................................... 34,672 34,672 353,801 353,801
Retained earnings:Balance at the beginning of current period ........................... 74,902 82,484 764,309 841,683Dividends from retained earnings ......................................... (3,623) (3,704) (36,977) (37,799)Net income ............................................................................ 11,206 11,529 114,351 117,645Balance at the end of current period ..................................... 82,484 90,309 841,683 921,528
Treasury stock:Balance at the beginning of current period ........................... (6,048) (6,048) (61,715) (61,715)Purchase of treasury stock ................................................... - (0) - (6)Balance at the end of current period ..................................... (6,048) (6,048) (61,715) (61,721)
Valuation difference on available-for-sale securities:Balance at the beginning of current period ........................... 163 157 1,663 1,609Net changes of items other than shareholders’ equity .......... (5) 383 (54) 3,917Balance at the end of current period ..................................... 157 541 1,609 5,526
Foreign currency translation adjustment:Balance at the beginning of current period ........................... (5,948) (5,892) (60,698) (60,124)Net changes of items other than shareholders’ equity .......... 56 5,361 573 54,714Balance at the end of current period ..................................... (5,892) (530) (60,124) (5,410)
Minority interests:Balance at the beginning of current period ........................... 764 569 7,797 5,810Net changes of items other than shareholders’ equity .......... (194) (57) (1,986) (584)Balance at the end of current period ..................................... 569 512 5,810 5,225
Total net assets ........................................................................ ¥ 140,873 ¥ 154,385 $ 1,437,479 $ 1,575,366
SeeNotestoConsolidatedFinancialStatements.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS Annual Report 2013
19
CONSOLIDATED STATEMENTS OF CASH FLOWS
HamamatsuPhotonicsK.K.andConsolidatedSubsidiariesYearendedSeptember30,2012and2013
Millions ofJapanese Yen
Thousands ofU.S. Dollars (Note 1)
2012 2013 2012 2013
Operating activities:Income before income taxes and minority interests .......................... ¥ 17,812 ¥ 17,904 $ 181,759 $ 182,694Depreciation and amortization .......................................................... 8,734 8,672 89,125 88,491Impairment loss ................................................................................. 424 - 4,330 -Increase (decrease) in allowance for doubtful accounts ................... (8) (5) (84) (54)Increase (decrease) in provision for bonuses ................................... (362) 56 (3,694) 571Decrease in provision for retirement benefits .................................... (555) (5,805) (5,668) (59,236)Interest and dividends income .......................................................... (198) (206) (2,024) (2,111)Interest expenses .............................................................................. 115 104 1,181 1,071Foreign exchange gains .................................................................... (6) (44) (70) (450)Equity in earnings of affiliates ........................................................... (83) (78) (854) (797)Loss on retirement of property, plant and equipment........................ 44 39 455 402Gain on sales of property, plant and equipment ............................... (7) (15) (81) (160)Loss on valuation of investment securities ........................................ 91 - 935 -Decrease (increase) in notes and accounts receivable-trade ........... 322 1,711 3,287 17,468Decrease (increase) in inventories .................................................... (2,004) 1,316 (20,456) 13,430Increase (decrease) in notes and accounts payable-trade ............... (1,841) (2,887) (18,786) (29,460)Other, net .......................................................................................... 1,457 (171) 14,870 (1,753)
Subtotal ....................................................................................... 23,934 20,590 244,226 210,106Interest and dividends income received ............................................ 198 207 2,022 2,113Interest expense paid ........................................................................ (115) (104) (1,181) (1,071)Income taxes paid ............................................................................. (9,077) (6,003) (92,625) (61,261)Net cash provided by operating activities .......................................... 14,939 14,688 152,442 149,886
Investing activities:Net decrease (increase) in time deposits .......................................... (772) 3,022 (7,879) 30,843Proceeds from sales of short-term investment securities ................. 1,500 - 15,306 -Purchase of property, plant and equipment ...................................... (8,915) (8,433) (90,969) (86,060)Proceeds from sales of property, plant and equipment..................... 35 73 364 753Purchase of intangible assets ........................................................... (603) (761) (6,159) (7,770)Purchase of investments in subsidiaries ........................................... - (489) - (4,994)Other, net .......................................................................................... (45) 94 (466) 968Net cash used in investing activities ................................................. (8,800) (6,493) (89,805) (66,259)
Financing activities:Net increase (decrease) in short-term loans payable ....................... 474 (56) 4,840 (572)Proceeds from long-term loans payable ........................................... 90 3,152 918 32,163Repayment of long-term loans payable ............................................ (283) (3,295) (2,894) (33,624)Purchase of treasury stock ................................................................ - (0) - (6)Cash dividends paid .......................................................................... (3,627) (3,706) (37,019) (37,823)Other, net .......................................................................................... (158) (145) (1,612) (1,487)Net cash used in financing activities ................................................. (3,505) (4,052) (35,766) (41,350)
Effect of exchange rate change on cash and cash equivalents ....... 85 2,944 874 30,043Net increase in cash and cash equivalents ........................................ 2,719 7,087 27,745 72,319Cash and cash equivalents at beginning of period ............................ 33,045 35,764 337,201 364,946Cash and cash equivalents at end of period ...................................... ¥ 35,764 ¥ 42,852 $ 364,946 $ 437,266
SeeNotestoConsolidatedFinancialStatements.
20
(a) Principles of ConsolidationThe consolidated financial statements as of and for the year ended September 30, 2012 and 2013 included the accounts of the Company, five domestic subsidiaries and twelve foreign subsidiaries in the United States of America, EU and People’s Republic of China. The Company has adopted the equity method of accounting for its investment in four affiliates for the years ended September 30, 2012 and three affiliates for the years ended September 30, 2013. Investment in other affiliates is carried at cost due to its immateriality. All significant intercompany balances and transactions have been eliminated in consolidation.
(b) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, readily available deposits and highly liquid investments with insignificant risk of changes in value, which have original maturities of three months or less.
(c) Investment SecuritiesMarketable securities are valued by market price method based on the fair market price at the balance sheet date (unrealized gain or loss, net of applicable income taxes, included directly in net assets) and non-marketable securities are stated at cost determined by the total average method.
(d) InventoriesInventories of the Company and consolidated subsidiaries are mainly stated at cost determined by the total average method of reducing book value when the contribution of inventories to profitability declines.
(e) Property, Plant and Equipment, and DepreciationProperty, plant and equipment are stated at cost. Significant renewals and additions are capitalized. Maintenance and repairs, including minor renewals and improvements, are charged to income as incurred. Interest expense relating to the construction of plant and equipment is not capitalized. Depreciation of plant and equipment is determined by the declining-balance method over the estimated useful lives of the individual assets for the Company and its domestic subsidiaries. The straight-line method over the estimated useful lives of the individual assets is primarily applied to the plant and equipment of foreign subsidiaries.
(f) Retirement and Severance BenefitsThe allowance for retirement and severance benefits represent the projected benefit obligations in excess of the plan asset at the balance sheet date. Prior service cost is amortized by the straight-line method over 10 years. Actuarial gain or loss is amortized by the straight-line method over 10 years from the following fiscal year.
(g) Foreign Currency TranslationMonetary assets and liabilities denominated in foreign currencies are translated into yen at the exchange rates in effect on the respective balance sheet dates or at the rate of each forward exchange contract. Assets and liabilities accounts of foreign consolidated subsidiaries are translated into yen amounts at the exchange rates in effect at the each balance sheet date. Revenue and expense accounts of foreign consolidated subsidiaries were translated into yen amounts at average rates for the period for each fiscal year. Any resulting translation differences are included in Minority interests in consolidated subsidiaries and adjustments arising from translation of accounts of foreign consolidated subsidiaries as a separate component of net assets.
(h) Hedging AccountThe Companies have entered into foreign forward contracts in order to manage the exposures to risk arising from fluctuations in foreign currency exchange rates. All derivative financial instruments are recognized as either assets or liabilities and measured at fair value with any changes in unrealized gain or loss recognized in the statements of income, except for those which meet the criteria for deferral hedge accounting under which unrealized loss or gain is deferred as an asset or liability until maturity of the hedged transactions.
(i) Income TaxesDeferred income taxes are provided on the asset and liability method by which deferred tax assets and liabilities are recognized based on the temporary differences between the assets and liabilities for financial reporting and those for tax purpose, and are measured by applying currently enacted tax laws.
2. Summary of Significant Accounting Policies
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of Hamamatsu Photonics K.K. (the “Company”) and consolidated subsidiaries are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards, and are compiled from the consolidated financial statements prepared by the Company as required by the Financial Instruments and Exchange Law of Japan. For convenience, the accompanying consolidated financial statements have been presented in U.S. dollars by arithmetically translating all Japanese yen amounts at ¥98 = US$ 1, the exchange rate prevailing on September 30, 2013. The translations should not be construed as a representation that Japanese yen have
been, could have been, or could in the future be, converted into U.S. dollars at that or any other rate.In preparing the consolidated financial statements, certain rearrangements and reclassifications have been made and certain additional financial information has been included in the consolidated financial statements issued in Japan for the convenience of readers outside Japan. Amount less than one million yen and one thousand dollars have been omitted. As a result, the total in Japanese yen and U.S. dollars shown in the financial statements do not necessarily agree with the individual amounts.
Annual Report 2013
21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Other Comprehensive Income
Reclassification adjustments and income tax effect allocated to each component of other comprehensive income for the year ended September 30, 2012 and 2013 were as follows:
Millions of Japanese Yen
Thousands of U.S. Dollars
2012 2013 2012 2013Valuation difference on available-for-sale securities:
Amount arising during the year ¥ (97) ¥ 420 $ (999) $ 4,295Reclassification adjustments 91 - 935 -
Amount before income tax effect (6) 420 (63) 4,295Income tax effect 0 (37) 9 (377)Valuation difference on available-for-sale securities (5) 383 (54) 3,917
Foreign currency translation adjustment:Amount arising during the year 62 5,386 636 54,962Reclassification adjustments - (21) - (219)
Foreign currency translation adjustment 62 5,364 636 54,743
Share of other comprehensive income of associates accounted for using equity method:
Amount arising during the year (3) 34 (31) 347Reclassification adjustments - 39 - 402
Share of other comprehensive income of associates accounted for using equity method (3) 73 (31) 749
Total other comprehensive income ¥ 54 ¥ 5,822 $ 551 $ 59,410
(j) Per share informationNet income per share is computed based on the net income available for distribution to the shareholders of common stock and the weighted average number of shares outstanding during the year. Cash dividends per share shown for each year in the consolidated statements of income represent dividends declared as applicable to the respective periods.
(k) Additional informationDiscontinuance of directors’ retirement benefitsThe board of directors resolved to abolish the retirement benefits plan, and the annual general meeting of shareholders on December 20, 2012 approved the payment of the accrued retirement benefits to the directors, audit & supervisory board members after they retire.
This is because that the scheme is based largely on seniority and end-of-service lump sum payment. As the result, effective fiscal year ended September 30, 2013 it is included in noncurrent liabilities as “Other” account for Yen 1,347 million (US$ 13,752 thousand) which had been provisioned until the shareholders’ meeting on December, 2012.
Provision for retirement benefitsIn the last fiscal year, to promote the soundness of financial retirement benefits, the Company contributed ¥5,000 million (US$ 51,020 thousand) in cash to the retirement benefit trust. Accordingly, the balance of provision for retirement benefits has decreased by the same amount.
22
4. Short-Term and Long-Term Loans Payable
Short-term bank loans represent notes maturing generally within six months. The average annual interest rate applicable to the short-term bank loans at September 30, 2013 was 0.9%.Long-term debt at September 30, 2012 and 2013 were as follows:
Millions of Japanese Yen
Thousands of U.S. Dollars
2012 2013 2012 2013Loans principally from banks due serially through 2026 ¥ 7,413 ¥ 7,270 $ 75,650 $ 74,189Less current portion (3,290) (186) (33,575) (1,900)
¥ 4,123 ¥ 7,084 $ 42,075 $ 72,289
At September 30, 2012 and 2013, property, plant and eqipment which had a carrying amount of ¥5,144 million (US$ 52,499 thousand) and ¥4,810 million (US$ 49,089 thousand) were pledged as collateral for short-term bank loans and long-term debt, respectively.
5. Investment Securities
Information regarding the marketable securities classified as other securities as of September 30, 2012 and 2013 were as follows:
Millions of Japanese Yen Thousands of U.S. Dollars2012 2012
Cost Carrying amount
Unrealized gain
Unrealized loss Cost Carrying
amountUnrealized
gainUnrealized
lossEquity securities ¥ 911 ¥ 1,077 ¥ 165 - $ 9,299 $ 10,992 $ 1,693 -Other - - - - - - - -
¥ 911 ¥ 1,077 ¥ 165 - $ 9,299 $ 10,992 $ 1,693 -
Millions of Japanese Yen Thousands of U.S. Dollars2013 2013
Cost Carrying amount
Unrealized gain
Unrealized loss Cost Carrying
amountUnrealized
gainUnrealized
lossEquity securities ¥ 911 ¥ 1,498 ¥ 586 - $ 9,299 $ 15,287 $ 5,988 -Other - - - - - - - -
¥ 911 ¥ 1,498 ¥ 586 - $ 9,299 $ 15,287 $ 5,988 -
The information of available-for-sale securities which were sold during the year ended September 30, 2012 and 2013 were as follows:
Millions of Japanese Yen Thousands of U.S. Dollars2012 2012
Proceeds Unrealized gain
Unrealized loss Proceeds Unrealized
gainUnrealized
lossEquity securities - - - - - -Other ¥ 1,500 - - $ 15,306 - -
¥ 1,500 - - $ 15,306 - -
The impairment losses on the marketable securities for the year ended September 30 2012 were ¥91 million (US$ 935 thousand).
Annual Report 2013
23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Retirement and severance benefits
The Company and certain domestic subsidiaries have retirement and severance benefit plans for employees who are entitled to annuity and lump-
sum payments, the amounts of which are determined based on basic rate of pay, length of service and other conditions. Certain of the overseas
subsidiaries have their own retirement and severance benefit plans for covering substancially all employees who meet the eligibility requirements.
The liability for employees’ retirement and severance benefits at September 30, 2012 and 2013 consisted of the following:
Millions of Japanese Yen
Thousands of U.S. Dollars
2012 2013 2012 2013Projected benefit obligation ¥ (22,800) ¥ (23,682) $ (232,658) $ (241,654)
Fair value of plan asset 9,010 17,340 91,948 176,940
Unrecognized actuarial gain 1,110 (662) 11,328 (6,755)
Unrecognized prior service cost (691) (605) (7,059) (6,177)
¥ (13,371) ¥ (7,609) $ (136,441) $ (77,647)
The components of net periodic benefit cost for the year ended September 30, 2012 and 2013 were as follows:
Millions of Japanese Yen
Thousands of U.S. Dollars
2012 2013 2012 2013Service cost ¥ 1,140 ¥ 1,187 $ 11,637 $ 12,113
Interest cost 434 448 4,434 4,580
Expected return on plan assets (138) (178) (1,415) (1,822)
Amortization of prior service cost (86) (86) (882) (882)
Amortization of actuarial gain or loss 306 171 3,122 1,745
¥ 1,655 ¥ 1,541 $ 16,896 $ 15,733
Assumptions used in calculation for the year ended September 30, 2012 and 2013 were as follows:
2012 2013
Discount rate 2.0 % 2.0 %
Expected rate of return on plan assets 2.0 % 2.0 %
Allocation method of projected benefit to service periods Straight-line Straight-line
Amortization period of prior service cost 10 years 10 years
Amortization period of unrecognized actuarial differences 10 years 10 years
24
7. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted in normal
effective statutory tax rate of approximately 39.74% and 37.20% for the year ended September 30, 2012 and 2013 respectively.
Significant components of deferred tax assets and liabilities at September 30, 2012 and 2013 were as follows:
Millions of Japanese Yen
Thousands of U.S. Dollars
2012 2013 2012 2013Deferred tax assets:
Provision for retirement benefits ¥ 4,758 ¥ 2,718 $ 48,561 $ 27,741Depreciation 1,883 2,097 19,218 21,398Contribution to retirement benefit trust - 1,741 - 17,770Provision for bonuses 1,044 1,066 10,659 10,882Unrealized gain on sales of inventories 1,212 1,006 12,376 10,272Noncurrent accounts payable - 469 - 4,789Write down of inventories 397 411 4,054 4,194Impairment loss 320 320 3,266 3,266Write down of investment securities 240 240 2,450 2,450Provision for directors' retirement benefits 477 - 4,870 -Others 870 920 8,878 9,394Less valuation allowance (1,731) (1,702) (17,670) (17,376)
Total deferred tax assets ¥ 9,473 ¥ 9,288 $ 96,666 $ 94,784Amount set off against deferred tax liabilities (38) (73) (389) (749)
Net deferred tax assets ¥ 9,435 ¥ 9,215 $ 96,277 $ 94,035
Deferred tax liabilities
Deferred income under preferential tax treatment ¥ 146 ¥ 195 $ 1,494 $ 1,997Others 81 180 828 1,843
Total deferred tax liabilities ¥ 227 ¥ 376 $ 2,323 $ 3,841Amount set off against deferred tax assets (38) (73) (389) (749)
Net deferred tax liabilities ¥ 189 ¥ 303 $ 1,933 $ 3,092
A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consolidated
statements of income for the years ended September 30, 2012 and 2013 were as follows:
2012 2013Normal effective statutory tax rate for the Company 39.74 % 37.20 %
Tax credit (5.94) (2.81)Statutory tax rates variance of overseas subsidiaries (3.31) (1.36)Net changes in valuation allowance 1.26 (0.26)Expenses not deductible for income tax purposes 1.13 1.76Reduction in deferred tax assets due to tax rate changes 4.80 -Other, net 0.33 1.04
Actual effective tax rate 38.01 % 35.57 %
Annual Report 2013
25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Segment Information
1. Summary of Reporting SegmentsThe Company’s reportable segments are components of the Company about which separate financial information is available. These segments are subject to periodic examinations to enable the Company’s board of directors to decide how to allocate resources and assess performance.The Company’s business divisions are based on product and service categories. Each of the divisions conduct business based on comprehensive strategies formulated for the products and services that they handle.Therefore, the Company’s business segments, based on the products and services handled by each of the divisions, comprise its three principal reporting segments, which are Electron tube, Opto-semiconductor, and Imaging and measurement instruments.The electron tube business segment manufactures and sells Photomultiplier tubes (PMTs) and light sources and imaging devices. The Opto-semiconductor business segment manufactures and sells opto-semiconductor devices. The imaging and measurement instruments business segment manufactures and sells image processing and measurement systems.
2. Method for Calculating the Sales, Income (Loss), Assets, and Other Items for Reporting SegmentsFigures for income in reporting segments are based on an operating income. Intersegment sales and transfers are based on prevailing market prices.
3. Information on the Amounts of Sales, Income (Loss), Assets, and Other Items for Reporting Segments
Millions of Japanese Yen
Reportable Segment
Others Total Adjustment Consolidated totalYear ended or as of September 30, 2012 Electron
tubeOpto-
semiconductor
Imaging and measurement instruments
Total
Net salesOutside customers ¥ 42,245 ¥ 42,228 ¥ 10,983 ¥ 95,458 ¥ 2,609 ¥ 98,067 - ¥ 98,067Intersegment 1,246 617 46 1,910 390 2,300 (2,300) -
Total net sales 43,492 42,846 11,029 97,368 2,999 100,368 (2,300) 98,067
Segment income ¥ 16,215 ¥ 14,034 ¥ 587 ¥ 30,836 ¥ (197) ¥ 30,639 ¥ (13,051) ¥ 17,587
Assets ¥ 37,696 ¥ 33,803 ¥ 9,829 ¥ 81,328 ¥ 4,328 ¥ 85,657 ¥ 104,312 ¥ 189,970Other items
Depreciation and amortization ¥ 2,934 ¥ 2,840 ¥ 931 ¥ 6,706 ¥ 261 ¥ 6,967 ¥ 1,702 ¥ 8,670Increase in property, plant and equipment and intangible assets ¥ 3,557 ¥ 2,619 ¥ 933 ¥ 7,110 ¥ 296 ¥ 7,407 ¥ 1,827 ¥ 9,235
Millions of Japanese YenReportable Segment
Others Total Adjustment Consolidated totalYear ended or as of September 30, 2013 Electron
tubeOpto-
semiconductorImaging and
measurement instruments
Total
Net salesOutside customers ¥ 43,764 ¥ 42,176 ¥ 13,240 ¥ 99,180 ¥ 2,975 ¥ 102,156 - ¥ 102,156 Intersegment 1,246 622 41 1,910 692 2,603 (2,603) -
Total net sales 45,010 42,798 13,282 101,091 3,667 104,759 (2,603) 102,156 Segment income ¥ 16,040 ¥ 12,406 ¥ 1,584 ¥ 30,031 ¥ 153 ¥ 30,185 ¥ (13,403) ¥ 16,781
Assets ¥ 38,212 ¥ 35,012 ¥ 10,273 ¥ 83,498 ¥ 5,164 ¥ 88,663 ¥ 109,614 ¥ 198,278 Other items
Depreciation and amortization ¥ 2,841 ¥ 2,620 ¥ 1,268 ¥ 6,730 ¥ 276 ¥ 7,006 ¥ 1,605 ¥ 8,612 Increase in property, plant and equipment and intangible assets ¥ 3,007 ¥ 3,452 ¥ 838 ¥ 7,298 ¥ 415 ¥ 7,714 ¥ 2,245 ¥ 9,959
26
Thousands of U.S. Dollars
Reportable Segment
Others Total Adjustment Consolidated totalYear ended or as of September 30, 2012 Electron
tubeOpto-
semiconductor
Imaging and measurement instruments
Total
Net sales
Outside customers $ 431,080 $ 430,906 $ 112,075 $ 974,062 $ 26,626 $ 1,000,689 - $ 1,000,689
Intersegment 12,722 6,301 472 19,497 3,979 23,477 (23,477) -
Total net sales 443,803 437,208 112,548 993,560 30,606 1,024,166 (23,477) 1,000,689
Segment income $ 165,459 $ 143,212 $ 5,990 $ 314,661 $ (2,018) $ 312,643 $ (133,179) $ 179,463
Assets $ 384,654 $ 344,929 $ 100,299 $ 829,883 $ 44,170 $ 874,053 $ 1,064,417 $ 1,938,471
Other items
Depreciation and amortization $ 29,940 $ 28,985 $ 9,505 $ 68,432 $ 2,666 $ 71,099 $ 17,376 $ 88,476Increase in property, plant and equipment and intangible assets $ 36,300 $ 26,733 $ 9,524 $ 72,558 $ 3,023 $ 75,582 $ 18,652 $ 94,235
Thousands of U.S. Dollars
Reportable Segment
Others Total Adjustment Consolidated totalYear ended or as of September 30, 2013 Electron
tubeOpto-
semiconductorImaging and
measurement instruments
Total
Net salesOutside customers $ 446,572 $ 430,370 $ 135,105 $ 1,012,048 $ 30,361 $ 1,042,409 - $ 1,042,409Intersegment 12,721 6,349 428 19,499 7,066 26,566 (26,566) -
Total net sales 459,293 436,719 135,533 1,031,547 37,428 1,068,976 (26,566) 1,042,409
Segment income $ 163,681 $ 126,593 $ 16,166 $ 306,441 $ 1,570 $ 308,012 $ (136,771) $ 171,241
Assets $ 389,924 $ 357,275 $ 104,831 $ 852,030 $ 52,701 $ 904,732 $ 1,118,514 $ 2,023,246Other items
Depreciation and amortization $ 28,991 $ 26,741 $ 12,945 $ 68,678 $ 2,818 $ 71,497 $ 16,383 $ 87,880Increase in property, plant and equipment and intangible assets $ 30,692 $ 35,232 $ 8,551 $ 74,476 $ 4,239 $ 78,716 $ 22,912 $ 101,628
Annual Report 2013
27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Segment Information (continued)
Geographic Information
Millions of Japanese Yen
Year ended September 30, 2012 Japan North America Europe Asia Other Consolidated
totalSales ¥ 35,477 ¥ 24,020 ¥ 24,221 ¥ 13,849 ¥ 499 ¥ 98,067
Thousands of U.S. Dollars
Year ended September 30, 2012 Japan North America Europe Asia Other Consolidated
totalSales $ 362,011 $ 245,103 $ 247,161 $ 141,321 $ 5,092 $ 1,000,689
Millions of Japanese Yen
Year ended September 30, 2013 Japan North America Europe Asia Other Consolidated
totalSales ¥ 32,393 ¥ 28,624 ¥ 26,045 ¥ 14,842 ¥ 249 ¥ 102,156
Thousands of U.S. Dollars
Year ended September 30, 2013 Japan North America Europe Asia Other Consolidated
totalSales $ 330,549 $ 292,090 $ 265,766 $ 151,452 $ 2,550 $ 1,042,409
9. Subsequent Events
Appropriations of retained earningsUnder the Corporation law of Japan, a plan for the appropriation of retained earnings (primarily for cash dividend payments) proposed by the board of directors is to be approved at a shareholders’ meeting held within three months from the end of the fiscal year.
On December 20, 2013, the shareholders of the Company approved the plan for the appropriation of retained earnings, which resulted in the following deductions from retained earnings at September 30, 2013:
Millions of Japanese Yen
Thousands of U.S. Dollars
Cash dividends ¥ 2,174 $ 22,186
28
REPORT OF INDEPENDENT AUDITORS Annual Report 2013
29
DIRECTORS AND CORPORATE AUDITORS
Board of Directors and Corporate Auditors
Chairman of the Board
Teruo Hiruma
President and CEO
Akira Hiruma, Representative Director
Vice President
Haruji Ohtsuka, Representative Director
Senior Managing Directors
Koei Yamamoto, Representative DirectorJunichi Takeuchi, Representative Director
Managing Directors
Hitoshi IidaKenji Suzuki
Mitsutaka TakemuraTsutomu HaraKenji Yoshida
Directors
Hirofumi UchiyamaTakashi Koike
Tadahiko ShimazuSoichiro Okudaira
Audit & Supervisory Board Member
Fumio Muramatsu (Standing)Kazuhiko Mori (Standing)
Masaharu HamakawaYuji Maki
30
Hamamatsu Photonics K.K.(Registered address)
1126-1 Ichino-cho, Higashi-ku, Hamamatsu CityShizuoka Prefecture 435-8558, Japan
Telephone : (81)53-434-3311
Established: September 29, 1953
Paid-in Capital: 34,928,648,325 yen
Common Stock Authorized: 250,000,000 shares Issued: 83,764,984 shares
Stock Listing: Tokyo Stock Exchange (1st Section) ID number 6965 Trading Unit 100 shares
Number of Shareholders: 26,441
Number of Employees: 4,415
Independent Auditors: Ernst & Young ShinNihon LLC Hamamatsu City, Shizuoka Prefecture Transfer Agent and Registrar: Sumitomo Mitsui Trust Bank, Limited Chiyoda-ku, Tokyo
Annual Meeting: The annual meeting of shareholders is held in December of each year in Hamamatru City, Japan
Price range of stock traded(Thousand yen)
2.42.62.83.03.23.43.63.84.04.2
10/12 11 12 1/13 2 3 4 5 6 7 8 9
Major shareholders Percentage to total As of September 30, 2013 shares outstanding (%)
Toyota Motor Corporation ............................................................................................................. 5.01The Master Trust Bank of Japan, Ltd. (Trust Account) ................................................................. 4.21Hamamatsu Photonics K.K. employees ....................................................................................... 4.14Japan Trustee Services Bank, Ltd. (Trust Account) ..................................................................... 2.86Teruo Hiruma................................................................................................................................. 1.88State Street Bank and Trust Company ......................................................................................... 1.87The Nomura Trust and Banking Co., Ltd. (Investment Trust)........................................................ 1.81Mellon Bank Treaty Clients Omnibus ............................................................................................ 1.79The Chase Manhattan Bank, N.A. London Secs Lending Omnibus Account .............................. 1.66State Street Bank and Trust Company 505225 ............................................................................ 1.33
CORPORATE DATA Annual Report 2013
31
PROFILE OF THE HAMAMATSU FAMILY
Hamamatsu Photonics Italia S.r.l.Main officeStrada della Moia, 1 int. 620020 Arese (Milano), ItalyTelephone: (39)02-93581733
Rome officeViale Cesare Pavese, 43500144 Roma, ItalyTelephone: (39)06-50513454
Hamamatsu Photonics UK LimitedMain office2 Howard Court, 10 Tewin RoadWelwyn Garden CityHertfordshire AL7 1BW, UKTelephone: (44)1707-294888
South African officePO Box 1112Buccleuch 2066Johannesburg, South AfricaTelephone: (27)11-802-5505
Europe
Hamamatsu Photonics Deutschland GmbHMain officeArzbergerstr. 10D-82211 Herrsching am Ammersee, GermanyTelephone: (49)8152-375-0
North West officeKonrad-Adenauer-Str. 58D-47608 Geldern, GermanyTelephone: (49)2831-94506
Danish officeLautruphøj 1-3DK-2750 Ballerup, DenmarkTelephone: (45)7020-93 69
Netherlands officeTelevisieweg 2NL-1322 AC Almere, The NetherlandsTelephone: (31)36-5405384
Poland officeul. sw. A. Boboll 8PL-02525 Warsaw, Poland Telephone: (48)22-646-0016
Hamamatsu Photonics France S.A.R.L.Main office19, Rue du Saule TrapuParc du Moulin de Massy91882 Massy Cedex, FranceTelephone: (33)1 69 53 71 00
Grenoble officeBuro Club Meylan29 Boulevard des Alpes38246 Meylan Cedex, FranceTelephone: (33)4 76 61 44 50
Swiss officeDornacherplatz 74500 Solothurn, SwitzerlandTelephone: (41)32 625 60 60
Belgian officeAxisparc Technology, Rue Andre Dumont 7 1435 Mont-Saint-Guibert, BelgiumTelephone: (32)10 45 63 34
Spanish officeC. Argenters, 4 edif 2Parque Tecnológico del Vallés08290 Cerdanyola (Barcelona), SpainTelephone: (34)93 582 44 30
Hamamatsu Photonics Norden ABMain officeTorshamnsgatan 35SE-164 40 Kista, SwedenTelephone: (46)8-509 031 00
Russian office11, Chistoprudny Boulevard, Building 1, 101000, Moscow, RussiaTelephone: (7)495 258 85 18
32
U.S.A.
Photonics Management Corp.360 Foothill Road,Bridgewater, NJ 08807, U.S.A.Telephone: (1)908-231-0960
Hamamatsu CorporationMain office360 Foothill Road,Bridgewater, NJ 08807, U.S.A.Telephone: (1)908-231-0960
Factory250 Wood Ave.Middlesex, NJ 08846, U.S.A.Telephone: (1)732-356-1203
Western Sales officeSuite 200 & Suite 1102875 Moorpark Ave. San Jose, CA 95128, U.S.A.Telephone: (1)408-261-2022
Southwest Sales officeSuite 2006310 Greenwich Drive San Diego, CA 92122, U.S.A. Telephone: (1)858-210-6701
Midwest Sales office4711 Golf Road, Suite 805Skokie, IL 60076, U.S.A.Telephone: (1)847-825-6046
Northeast Sales office20 Park Plaza, Suite 312Boston, MA 02116, U.S.A. Telephone: (1)617-536-9900
Pittsburgh Sales office2593 Wexford Bayne Road Suite 305Sewickley, PA 15143, U.S.A. Telephone: (1)724-935-3600
Asia
Hamamatsu Photonics (China) Co., Ltd.B1201 Jiaming Center, No.27 Dongsanhuan Beilu, Chaoyang District, Beijing 100020, ChinaTelephone: (86)10-6586-6006
Beijing Hamamatsu Photon Techniques, Inc.Head officeRoom 903, Noble Center #3, 128 South 4th Ring Road West, Fengtai District, Beijing, 100070 ChinaTelephone:(86)10-6370-6370
Hangzhou Hamamatsu Photonics Science and Technology Co., Ltd.Room 303, 195 Baochu Road, Xihu District, Hangzhou 310017, China Telephone:(86)571-8717-8237
Japan
Hamamatsu Photonics K.K.Headquarters325-6, Sunayama-cho, Naka-kuHamamatsu City, Shizuoka Pref.430-8587, JapanTelephone: (81)53-452-2141
Electron Tube Division314-5, ShimokanzoIwata City, Shizuoka Pref.438-0193, JapanTelephone: (81)539-62-3151
Solid State Division1126-1, Ichino-cho, Higashi-kuHamamatsu City, Shizuoka Pref.435-8558, JapanTelephone: (81)53-434-3311
Systems Division812, Joko-cho, Higashi-kuHamamatsu City, Shizuoka Pref.431-3196, JapanTelephone: (81)53-435-1560
Central Research Laboratory5000, Hirakuchi, Hamakita-kuHamamatsu City, Shizuoka Pref.434-8601, JapanTelephone: (81)53-586-7111
Annual Report 2013
33
ANNUAL REPORT
For the year ended September 30, 2013
2013
HAMAMATSU PHOTONICS K.K.
HAMAMATSU PHOTONICS K.K.
325-6, Sunayama-cho, Naka-ku, Hamamatsu City 430-8587, JapanTelephone:81-53-452-2141, Fax:81-53-456-7889
Homepage Address:http://www.hamamatsu.com
HEADQUARTERS