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ANNUAL REPORT 2011For the year ended September 30, 2011

HAMAMATSU PHOTONICS K.K.


325-6, Sunayama-cho, Naka-ku, Hamamatsu City 430-8587, JapanTelephone:81-53-452-2141, Fax:81-53-456-7889Homepage Address:http://www.hamamatsu.com

HEADQUARTERS


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 AND SALES REPRESENTATIVES...32

2

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 ¥77 = U.S.$1.

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Consolidated:

Millions of Japanese Yen

Thousands of U.S. Dollars (*)

2010 2011 2010 2011

Net sales ...................................................................................... ¥ 90,958 ¥ 101,858 $ 1,181,285 $ 1,322,839 Operating income ......................................................................... 15,751 21,830 204,567 283,511 Income before income taxes and minority interests .................... 16,145 21,719 209,681 282,073 Net income ................................................................................... 11,491 13,702 149,236 177,953

Total assets .................................................................................. 176,407 188,091 2,291,000 2,442,747 Net assets .................................................................................... 124,481 133,434 1,616,645 1,732,910

R & D expenses ........................................................................... 9,550 10,081 124,037 130,929

Per share data (in Yen and U.S. Dollars)Net income ............................................................................. ¥ 142.93 ¥ 170.44 $ 1.85 $ 2.21 Cash dividends ....................................................................... ¥ 40.00 ¥ 44.00 $ 0.51 $ 0.57

Annual Report 2011

3

Non-consolidated:


Thousands of U.S. Dollars (*)

2010 2011 2010 2011

Net sales ...................................................................................... ¥ 79,235 ¥ 90,732 $ 1,029,027 $ 1,178,347 Operating income ......................................................................... 11,968 18,328 155,433 238,032 Income before income taxes ........................................................ 13,482 19,680 175,095 255,596 Net income ................................................................................... 9,985 12,689 129,683 164,796

Total assets .................................................................................. 163,473 175,032 2,123,028 2,273,144 Net assets .................................................................................... 116,180 125,445 1,508,833 1,629,159

R & D expenses ........................................................................... 9,422 9,934 122,370 129,016

Per share data (in Yen and U.S. Dollars)Net income ............................................................................. ¥ 124.00 ¥ 157.57 $ 1.61 $ 2.04 Cash dividends ....................................................................... ¥ 40.00 ¥ 44.00 $ 0.51 $ 0.57

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4

TO OUR SHAREHOLDERS

Dear Shareholders:

On behalf of all the employees of Hamamatsu Photonics K.K., I

would like to thank all shareholders for their continued support,

and to express our sympathies to everyone affected by the

Great East Japan Earthquake.

The financial performance of our Company during the fiscal

year that ended September 30, 2011, can be viewed against a

background of challenging economic circumstances. Although

the Japanese economy was buoyed at the beginning of the

fiscal period by factors such as the expansion of demand

in Asian countries and stimulus measures by the Japanese

government, the resulting upturn in manufacturing and exports

was understandably disrupted by the extensive damage of the

Great East Japan Earthquake on March 11. We have also seen

other causes for concern, such as the sovereign debt crisis in

Europe, growing worries of an economic downturn in the United

States, and the rise in valuation of the Japanese yen against

other currencies.

Within these circumstances, we continued to leverage the

proprietary photonics technologies that we have developed

over several decades, through their application in both basic

research and the creation of new value-added products. In

addition, we have continued to bolster our manufacturing

capabilities in line with our plans for future business expansion,

and were as proactive as ever in our efforts to meet new

business opportunities.

Annual Report 2011

5

Akira HirumaPresident and CEODecember 22, 2011

As a result, our Company achieved significant gains in both revenue and profit in fiscal year 2011. Thanks to increases

in overseas sales and domestic sales, total revenue was ¥101.858 billion, an increase of ¥10.899 billion (12.0%) over the

previous fiscal year. As for profits, pre-tax profit grew by 38.3% to ¥22.216 billion, while net profit increased by 19.2%

to ¥2.211 billion. These revenue and profit figures represent new records for Hamamatsu Photonics.

And so we continue to succeed, even as the world changes at a dizzying pace. I believe this success is due in no small

measure to the support and understanding that shareholders have shown toward our Company’s culture of research

and development. However, I also recognize that we must not be overly optimistic in our outlook, particularly in light

of economic concerns in Europe, U.S. and Japan. Therefore, as we continue to navigate a challenging business

environment, we will redouble our efforts in the development of markets in Asia, as well as in our research and

development of new seed technologies and their industrial applications.

Thank you for your continued support of our Company and its activities.

Sincerely,

6

DIVISIONAL REVIEW

Electron Tube Division

For over 50 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 2011, sales of these products accounted for 43.1% of the company’s total revenue.

Sales of photomultiplier tubes

In the medical field, sales of photomultiplier tubes (PMT) grew significantly due to increased demand for nuclear medical imaging systems (such as PET and SPECT(*1) systems) in North America, Europe, and Asia. Sales of PMTs for medical diagnostics equipment such as blood analyzers also grew steadily thanks to the high precision of these devices, as well as the development of easy-to-use modules. Furthermore, sales of PMTs for many measurement applications, including PMTs for oil well logging, also increased. As a result, sales of PMTs in fiscal year 2011 were ¥25.492 billion, an increase of 17.3% over the previous fiscal year.

(*1)SPECT(singlephotonemissioncomputedtomography)isatechniqueinnuclearmedicalimaginginwhichthepatientisinjectedwithagammaray-emittingisotope;thedistributionoftheisotopeisthenobservedviaaseriesofmultiplecross-sectionalimages.LikePETimaging,SPECTisafunctionalimagingtechnique.It iseffectiveintheearlydetectionofcerebrovasculardisorders,cancer,andcardiacdisease.

Sales of imaging devices and light sources

Sales of imaging devices were boosted by increased capital spending in the semiconductor manufacturing industry, as well as increased demand for microfocus X-ray sources for the non-destructive inspection of integrated circuit chips and lithium batteries. In medical imaging, growth was seen in the sales of scintillators (which convert X-ray images to visible images) for X-ray diagnostic systems. In the area of analytical instrumentation, the market responded favorably to our deuterium lamps due to their characteristics of high output, high stability, and long lifetimes. As a result, sales of imaging devices and light sources in fiscal year 2011 were ¥18.384 billion, an increase of 4.3% over the previous fiscal year.

PMT for oil well logging

Microfocus X-ray source

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7

Solid State Division

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 2011, sales of these products accounted for 42.5% of the company’s total revenue.

Sales of opto-semiconductors

Sales in the major product line of silicon photodiodes increased thanks to growing demand in developing countries for medical imaging systems. In the industrial manufacturing sector, capital investment in Asia spurred growth in demand for photodiodes for encoders, which are used in systems for controlling factory robots. Another product group, image sensors, also sold robustly due to growth in overseas demand for image sensors tailored for use in X-ray dental imaging systems. These and other factors helped boost the overall sales of opto-semiconductor devices to ¥43.271 billion in fiscal year 2011, an increase of 11.9% over the previous fiscal year.

Systems Division

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 2011, sales of these products accounted for 12.1% of the company’s total revenue.

Sales of imaging and measurement systems

In scientific imaging, increased competition in the worldwide market for high-resolution slide scanners for digital pathology had a negative impact on NanoZoomer sales. By contrast, growth was seen in the sales of digital cameras for scientific imaging, particularly in North America. Other growth segments included sales of systems for failure analysis in semiconductor manufacturing, which recovered due to increased demand in Asia, and sales of specialized light measurement systems (for example, new compact systems for fluorescence lifetime measurement and quantum yield measurement) to research institutions. As a result, sales of imaging and measurements systems were ¥12.338 billion in fiscal year 2011, an increase of 12.9% over the previous fiscal year.

Image sensors

Systems for semiconductor failure analysis

8

RESEARCH & DEVELOPMENT

Applying the accumulated expertise of over 50 years of developing photonic technologies, Hamamatsu Photonics continues to push forward with 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 2011, funds allocated to research and development totaled ¥10.081 billion, an increase of 5.6% over the previous fiscal year. Some highlights of our R&D efforts are presented here.

Basic research

Development of laser systems for thrombolysis

In collaboration with the Hamamatsu University School of Medicine, Hamamatsu Photonics is conducting research into the development of a laser system for thrombolysis(*2). The aim of this research is to develop a new laser-based method for removing blood clots as a means of treating cerebrovascular disorders, which is one of the three leading causes of death in Japan. At this point, experiments with lab rats have been successful. In the future, we hope to deploy a fiber-coupled catheter (a prototype of which is being developed with our university partner), as we continue to develop this new form of treatment for quickly and reliably dissolving blood clots.

Blood clot

Catheter

Vascular wall

Optical fiber

Laser beam

Blood clot

Conventional treatment (Case study courtesy of Hamamatsu Medical Center )

Before treatment After treatment

(*2)PartofthisresearchisconductedasaprojectforJapan’sNIBIO(NationalInstituteofBiomedicalInnovation).

Quantitative phase microscopy for cytoscreening

Quantitative phase microscopy enables the cross-sectional imaging, like X-ray computed tomography, of living cells. At this point, we have succeeded in capturing three-dimensional images, at the nanometer scale, of movement on the surfaces of cell nuclei in cultivated cancer cells. Understanding this type of movement is important in cytoscreening and drug screening. It is hoped that quantitative phase microscopy will become widely adopted as a technique for cell analysis in cytoscreening.

Annual Report 2011

9

Product development

Next-generation photomultiplier tube based on MEMS technology

Hamamatsu has successfully developed the μPMT (“micro PMT”), which is world’s first PMT based on MEMS technology(*3). This new device is only 1/7th the size and 1/9th the weight of the world’s smallest PMTs, which are currently manufactured by Hamamatsu. Despite its small size, the performance of the μPMT equals that of conventional PMTs. In the future, we expect the new device to contribute in a variety of ways, especially as medical devices and equipment for environmental measurement become more compact.

μPMT

(*3)MEMS (micro-electro-mechanical systems) refers to extremely small mechanical devices which are fabricated with semiconductormanufacturingtechnologies.

Compact MPPC module for high-precision radiation detection

Hamamatsu developed a compact, high-precision radiation detection module based on our high-sensitivity opto-semiconductor MPPC (Multi-Pixel Photon Counter) and CsI scintillator, which converts radiation into visible light. This module can quickly detect radioactive substances, such as radioisotopes of cesium or iodine, and is USB-powered, making it easy to integrate into various types of radiation monitoring equipment. Because of our experience with radiation detection technology in medical equipment and our semiconductor manufacturing expertise, we were able to provide an abundant supply of this module at low cost.

Radiation detection module

10

Establishment of Hamamatsu Photonics China

In response to growing demand in China for our products, during this past fiscal year a new sales subsidiary, Hamamatsu Photonics China (HPC), was established in Beijing. This new subsidiary will seek to expand sales growth and also provide technical support services to our many customers in China, some of which include manufacturing centers that have been set up in recent years by our customers based in North America and Europe. HPC’s product portfolio will include products manufactured in Japan as well as products developed at Beijing Hamamatsu Photonics, which until now had been the Hamamatsu’s center of PMT manufacturing and sales in China. HPC was established as a solely owned subsidiary of Hamamatsu Photonics K.K.

X-ray flat panel sensors with advanced amorphous silicon technology

Hamamatsu’s new flat panel sensors for X-ray imaging adopt advanced amorphous silicon technology, which allows for high-speed imaging over a large area with high resolution and high sensitivity. Advanced amorphous silicon minimizes the effect of after images, a limitation of conventional amorphous silicon (a material used in liquid crystal displays and solar batteries, among other things), by an order of magnitude. As this improvement enables high-precision imaging with movement, it is hoped that the new flat panel sensors will contribute to increased sales for such demanding applications as dental CT.

TOPICS

Opening ceremony of Hamamatsu Photonics China

Flat panel sensors

Annual Report 2011

11

Lineup of systems for solar cell evaluation

Solar cells have gained much attention as a source of clean energy, and in recent years there has been growing competition to manufacture better, more efficient solar cells. To gain competitive advantage, solar cell manufacturers have set stricter demands on inspection systems for finding defects. They are also seeking ways to improve the energy-yielding characteristics of new types of solar cells. Hamamatsu is ideally positioned to satisfy these needs, due to our long experience in designing systems for semiconductor failure analysis, as well as for specialized, high-precision light measurement. In our current lineup, we have a system that superimposes thermal and optical images to help manufacturers isolate the location of a short circuit, a key step in the quality control of solar cells prior to shipping. We also have a PV (photovoltaic) evaluation system that enables quantitative measurement of the changes in fluorescence lifetime and intensity distribution within a solar cell, so as to aid in the development of new materials for solar cells. Such systems represent one way in which Hamamatsu contributes to solutions for environmental problems and energy-related issues.

Superimposition of thermal and optical images in a silicon solar cell EPLi system for solar cell evaluation

Quantaurus-Tau system for fluorescence lifetime measurement

There are many applications for fluorescence lifetime measurement, including the evaluation of materials for organic EL (electroluminescence) devices and the detection of defects in solar cells or compound semiconductors in LEDs. Thanks to the smart design of the new Quantaurus-Tau (a compact, all-in-one system comprised of an excitation light source, optical system, and detector), users can make high-precision measurements without having to worry about time-consuming light source and optical adjustments prior to measurement.

Compact system for fluorescence lifetime measurement

12

FINANCIAL REVIEW

Net salesBusiness in Japan, from the beginning of the fiscal year, enjoyed a partial recovery due to increases in exports and production resulting from expanding demand from developing countries, mainly in Asia. This was aided by the economic policy of the government. However, the domestic economy suffered enormous damage by the Great East Japan Earthquake on March 11, 2011. In addition, the yen appreciated sharply due to the debt crisis in the EU and fears of economic downturn in the US. As a result, consolidated net sales for the fiscal year ended September 30, 2011 were JPY 101,858 million (US$1,322,839 thousand), up by 12.0% or JPY 10,899 million (US$141,554 thousand) over the previous year.Sales in the Electron Tube segment including Photomultiplier Tubes, Imaging Devices and Light Sources amounted JPY 43,877 million (US$ 569,836 thousand), 11.5% increase from JPY 4,518 million (US$58,687 thousand) the previous year. Sales of the Opto-semiconductor was JPY 43,271 million (US$ 561,962 thousand), up by 11.9% or JPY 4,600 million (US$59,740 thousand) over the previous year. Sales of the Imaging and Measurement Instruments segment including Image Processing and Measurement Systems rose 12.9% to JPY 12,338 million (US$ 160,238 thousand). Net sales from other business, mainly Semiconductor laser business and hotel operations, were JPY 2,371 million (US$ 30,802 thousand), up by 18.7% over last year.

Operating incomeCost of sales increased 7.6% or JPY 3,479 million (US$ 45,184 thousand) over the previous year to JPY 49,069 million (US$ 637,262 thousand) due to an increase in material cost. The cost of sales ratio weakened 1.9 points to 48.2% this year. Selling, general and administrative expenses were JPY 20,877 million (US$ 271,136 thousand), up by 4.0%, JPY 811 million (US$ 10,534 thousand). Research and development expenses were JPY 10,081 million (US$ 130,929 thousand), up by 5.6% from previous year. As a result, operating income was JPY 21,830 million (US$ 283,511 thousand), up by 38.6%. Operating income for Electron tube, Opto-Semiconductor and Imaging and measurement instruments business segment was JPY 17,338 million (US$ 225,181 thousand), up by 23.5%, JPY 15,818 million (US$ 205,440 thousand), up by 30.8% and JPY 1,501 million (US$ 19,502 thousand), up by 55.6%, respectively. Other business recorded an operating loss of JPY 260 million (US$ 3,378 thousand).

Net incomeOther expenses, on net basis, was JPY 110 million (US$ 1,437 thousand), compared with JPY 393 million (US$ 5,113 thousand) net of other income. Reflecting the sales growth and previously cited factors, net income for the fiscal year ended September 30, 2011 was up by 19.2% to JPY 13,702 million (US$ 177,953 thousand) from JPY 11,491 million (US$ 149,236 thousand). Consequently, basic net income per share increased from JPY 142.93 (US$ 1.85) to JPY 170.44 (US$ 2.21). Dividend per share applicable to the fiscal year was JPY 44 (US$ 0.57).

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Annual Report 2011

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Financial positionCurrent assets increased 11.0% to JPY 123,542 million (US$ 1,604,448 thousand). This is mainly from increases in cash and deposits and in inventories. Property, plant and equipment decreased from JPY 53,453 million (US$ 694,202 thousand) to JPY 52,247 million (US$ 678,540 thousand) because of the depreciation. Investments and other assets were JPY 12,301 million (US$ 159,759 thousand), up by 5.3% or JPY 618 million (US$ 8,035 thousand). Total Assets at the end of fiscal year 2011 were JPY 188,091 million (US$ 2,442,747 thousand), up by JPY 11,684 million (US$ 151,747 thousand). Current liabilities increased from JPY 29,952 million (US$ 388,993 thousand) to JPY 31,698 million (US$ 411,670 thousand). This is mainly from increases in accounts payable-facilities and in notes and accounts payable-trade. Noncurrent liabilities increased from JPY 21,972 million (US$ 285,361 thousand) to JPY 22,958 million (US$ 298,166 thousand) due mainly to increases in long-term debts. Total liabilities for the fiscal year ended September 30, 2011 were JPY 54,657 million (US$ 709,836 thousand), up by 5.3%. Net Assets were JPY 133,434 million (US$ 1,732,910 thousand), up by 7.2% or JPY 8,952 million (US$ 116,265 thousand) over previous year. The net assets ratio was 70.5%, compared to 70.1% at a year before. The current ratio was up from 371.5% to 389.7%.

Cash flowsAt the end of this fiscal year, cash and cash equivalent stood at JPY 33,045 million (US$ 429,165 thousand), up by JPY 4,298 million (US$ 55,823 thousand) from the end of the previous fiscal year. Net cash provided by operations for the period was JPY 20,418 million (US$ 265,169 thousand), down by JPY 5,856 million (US$ 76,056 thousand) over last year. This is mainly from an income tax paid, while there was an income tax refund in the corresponding period of the last year and from an increase of net income before tax. Investment activity required a cash flow of JPY 11,959 million (US$ 155,313 thousand), down by JPY 976 million (US$ 12,680 thousand) from previous year due mainly to increases in proceeds from sales of short-term investment securities, while there was a net increase in time deposits. Financial activity decreased cash flow by JPY 3,448 million (US$ 44,786 thousand) due mainly to increase in payment of dividend.

Capital expendituresCapital expenditures during fiscal year 2011 totaled JPY 7,348 million (US$ 95,429 thousand), 20.4% or JPY 1,888 million (US$ 24,522 thousand) lower than previous fiscal year. Capital expenditures for the Electron tube segment were JPY 3,158 million (US$ 41,016 thousand), mainly for expanding and improving the manufacturing, research and development facilities. In the Opto-semiconductor segment, major investments were made in renovation work of a factory aimed at the boosting production and in expanding and improving manufacturing, research and development facilities. Total investment for this segment amounted to JPY 2,173 million (US$ 28,230 thousand) for the fiscal year. Investments in Imaging and Measurement Instrument segment were JPY 274 million (US$ 3,561 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.

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FIVE-YEAR SUMMARY

Hamamatsu Photonics K.K. and Consolidated SubsidiariesYearendedSeptember30

Millions of Japanese Yen2007 2008 2009 2010 2011

For the year:Net sales ....................................................... ¥ 96,316 ¥ 98,811 ¥ 71,976 ¥ 90,958 ¥ 101,858Operating income .......................................... 19,873 20,052 3,741 15,751 21,830Income before income taxes

and minority interests ............................... 19,831 20,654 3,333 16,145 21,719Net income .................................................... 12,036 13,117 1,791 11,491 13,702

Capital expenditures...................................... 9,650 8,568 9,431 9,236 7,348Depreciation .................................................. 7,738 8,887 9,501 8,354 7,750R&D expenses .............................................. 9,699 10,160 9,520 9,550 10,081

At year-end:Working capital .............................................. ¥ 68,750 ¥ 76,634 ¥ 67,712 ¥ 81,318 ¥ 91,843Total assets ................................................... 170,143 174,991 158,026 176,407 188,091Common stock .............................................. 34,770 34,926 34,928 34,928 34,928Net assets ..................................................... 113,897 122,363 117,452 124,481 133,434

Number of shares issued (thousands) .......... 83,622 83,763 83,764 83,764 83,764Number of employees ................................... 3,600 3,762 3,793 4,002 4,188

Japanese YenPer share data:

Net incomeBasic......................................................... ¥ 159.86 ¥ 163.28 ¥ 22.29 ¥ 142.93 ¥ 170.44Diluted ...................................................... 148.63 161.94 22.12 - -

Cash dividends .............................................. 43.00 46.00 30.00 40.00 44.00Net assets ..................................................... 1,407.96 1,501.62 1,441.44 1,539.16 1,650.23

PercentRatios:

Equity ratio .................................................... 66.4 69.0 73.3 70.1 70.5Return on net sales ....................................... 12.5 13.3 2.5 12.6 13.5Return on assets ........................................... 7.3 7.6 1.1 6.9 7.5Return on equity ............................................ 12.0 11.2 1.5 9.6 10.7

Annual Report 2011

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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 Zheda 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

16

CONSOLIDATED BALANCE SHEETS

Hamamatsu Photonics K.K. and Consolidated SubsidiariesAsofSeptember30,2010and2011

ASSETSMillions of

Japanese YenThousands of

U.S. Dollars (Note 1)

2010 2011 2010 2011

Current assets:Cash and deposits ................................................................ ¥ 43,023 ¥ 71,073 $ 558,749 $ 923,032 Receivables:

Notes and accounts receivable-trade ............................. 23,020 23,781 298,961 308,849 Less: Allowance for doubtful accounts ........................... (134) (145) (1,753) (1,884)

Short term investment securities .......................................... 20,000 1,500 259,740 19,480 Inventories:

Merchandise and finished goods .................................... 5,193 6,014 67,453 78,116 Work in process .............................................................. 10,927 11,183 141,909 145,240 Raw materials and supplies ............................................ 4,605 5,147 59,808 66,849

Other ..................................................................................... 1,688 1,648 21,926 21,405 Deferred tax assets (Note 7) ................................................ 2,947 3,338 38,277 43,357

111,270 123,542 1,445,074 1,604,448

Property, plant and equipment (Note 4):Land ...................................................................................... 12,888 15,565 167,381 202,154 Buildings and structures ....................................................... 52,939 54,620 687,528 709,362 Machinery, equipments and vehicles ................................... 80,001 82,867 1,038,978 1,076,198 Construction in progress ...................................................... 4,681 1,777 60,797 23,086

150,510 154,831 1,954,686 2,010,801 Less: Accumulated depreciation .......................................... (97,057) (102,584) (1,260,483) (1,332,260)

53,453 52,247 694,202 678,540

Investments and other assets:Investment securities (Note 5) .............................................. 1,485 1,335 19,291 17,343 Investments in and advances to non-consolidated

subsidiaries and affiliates ............................................... 928 764 12,061 9,925 Other ..................................................................................... 2,283 3,070 29,661 39,881 Deferred tax assets (Note 7) ................................................ 6,984 7,130 90,708 92,607

11,682 12,301 151,723 159,759

¥ 176,407 ¥ 188,091 $ 2,291,000 $ 2,442,747

SeeNotestoConsolidatedFinancialStatements.

Annual Report 2011

17

LIABILITIES AND NET ASSETSMillions of


U.S. Dollars (Note 1)

2010 2011 2010 2011

Current liabilities:Short-term loans payable (Note 4) ....................................... ¥ 1,954 ¥ 865 $ 25,379 $ 11,242 Current portion of long-term loans payable (Note 4) ............ 132 281 1,719 3,651 Payables:

Notes and accounts payable-trade ................................. 12,575 13,454 163,324 174,734 Construction and other ................................................... 3,016 4,654 39,173 60,442

Income taxes payable (Note 7) ............................................ 4,945 4,698 64,227 61,021 Accrued expenses ................................................................ 4,819 5,045 62,587 65,519 Other ..................................................................................... 2,508 2,699 32,582 35,057

29,952 31,698 388,993 411,670

Noncurrent liabilities:Long-term loans payable (Note 4) ........................................ 6,192 7,326 80,426 95,146 Provision for retirement benefits (Note 6)............................. 15,553 15,175 201,987 197,083 Other ..................................................................................... 93 325 1,218 4,229 Deferred tax liabilities (Note 7) ............................................. 133 131 1,728 1,707

21,972 22,958 285,361 298,166

Net assets:Shareholders' equity

Capital stock, no par value: ............................................ 34,928 34,928 453,618 453,618 Authorized - 250,000,000 sharesIssued - 83,764,984 shares in 2010 - 83,764,984 shares in 2011

Capital surplus ................................................................ 34,672 34,672 450,293 450,293 Retained earnings (Note 9) ............................................. 64,743 74,902 840,820 972,757 Less: Treasury stock ....................................................... (6,047) (6,048) (78,538) (78,546)

Accumulated other complehensive incomeValuation difference on available-for-sale securities ...... 43 163 562 2,117 Foreign currency translation adjustment ........................ (4,599) (5,948) (59,733) (77,252)

Minority interests .................................................................. 740 764 9,622 9,923 124,481 133,434 1,616,645 1,732,910

¥ 176,407 ¥ 188,091 $ 2,291,000 $ 2,442,747


18

CONSOLIDATED STATEMENTS OF INCOME

Hamamatsu Photonics K.K. and Consolidated SubsidiariesYearendedSeptember30,2010and2011 Millions of


U.S. Dollars (Note 1)2010 2011 2010 2011

Net sales ................................................................................................ ¥ 90,958 ¥ 101,858 $ 1,181,285 $ 1,322,839

Operating costs and expenses:Cost of sales ..................................................................................... 45,590 49,069 592,078 637,262 Selling, general and administrative expenses ................................. 20,066 20,877 260,601 271,136 Research and development expenses ............................................. 9,550 10,081 124,037 130,929

Operating income ................................................................................. 15,751 21,830 204,567 283,511

Other income (expenses):Interest and dividend income ........................................................... 275 186 3,580 2,426 Interest expenses ............................................................................. (145) (117) (1,887) (1,530)Other, net .......................................................................................... 263 (179) 3,420 (2,333)

Income before income taxes and minority interests ....................... 16,145 21,719 209,681 282,073

Income taxes (Note 7)Current .............................................................................................. 5,980 8,466 77,664 109,959 Deferred ............................................................................................ (1,380) (508) (17,926) (6,600)

4,599 7,958 59,737 103,359

Income before minority interests ....................................................... - 13,760 - 178,713

Minority interests in income ............................................................... (54) (58) (706) (760)

Net income ............................................................................................. ¥ 11,491 ¥ 13,702 $ 149,236 $ 177,953

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Note 3)

Hamamatsu Photonics K.K. and Consolidated SubsidiariesYearendedSeptember30,2010and2011 Millions of


U.S. Dollars (Note 1)2010 2011 2010 2011

Income before minority interests ........................................................ - ¥ 13,760 - $ 178,713

Other comprehensive incomeValuation difference on available-for-sale securities ........................ - 119 - 1,554 Foreign currency translation adjustment ........................................... - (1,337) - (17,370)Share of other comprehensive income of associates

accounted for using equity method ............................................. - (27) - (361)Total other comprehensive income ................................................... - (1,245) - (16,177)

Comprehensive income ........................................................................ - ¥ 12,515 - $ 162,536

Comprehensive income attributable toComprehensive income attributable to owners of the parent ........... - 12,473 - 161,989 Comprehensive income attributable to minority interests ................ - 42 - 546

Japanese Yen U.S. Dollars (Note 1)2010 2011 2010 2011

Per share of common stock:Net income ........................................................................................ ¥ 142.93 ¥ 170.44 $ 1.85 $ 2.21 Cash dividends applicable to the year ............................................. 40.00 44.00 0.51 0.57


Annual Report 2011

19

Hamamatsu Photonics K.K. and Consolidated SubsidiariesYearendedSeptember30,2010and2011

Millions ofJapanese Yen

Thousands ofU.S. Dollars (Note 1)

2010 2011 2010 2011

Capital stock:Balance at the end of previous period .................................. ¥ 34,928 ¥ 34,928 $ 453,618 $ 453,618 Total changes of items during the period ............................. - - - -Balance at the end of current period .................................... 34,928 34,928 453,618 453,618

Capital surplus:Balance at the end of previous period .................................. 34,672 34,672 450,293 450,293 Total changes of items during the period ............................. - - - -Balance at the end of current period .................................... 34,672 34,672 450,293 450,293

Retained earnings:Balance at the end of previous period .................................. 55,265 64,743 717,729 840,820 Dividends from retained earnings ........................................ (2,013) (3,543) (26,145) (46,016)Net income ........................................................................... 11,491 13,702 149,236 177,953 Balance at the end of current period .................................... 64,743 74,902 840,820 972,757

Treasury stock:Balance at the end of previous period .................................. (6,046) (6,047) (78,527) (78,538)Purchase of treasury stock ................................................... (0) (0) (10) (8)Balance at the end of current period .................................... (6,047) (6,048) (78,538) (78,546)

Valuation difference on available-for-sale securities:Balance at the end of previous period .................................. 186 43 2,428 562 Net changes of items other than shareholders' equity ......... (143) 119 (1,865) 1,554 Balance at the end of current period .................................... 43 163 562 2,117

Foreign currency translation adjustment:Balance at the end of previous period .................................. (3,121) (4,599) (40,533) (59,733)Net changes of items other than shareholders' equity ......... (1,478) (1,348) (19,199) (17,518)Balance at the end of current period .................................... (4,599) (5,948) (59,733) (77,252)

Minority interests:Balance at the end of previous period .................................. 1,566 740 20,342 9,622 Net changes of items other than shareholders' equity ......... (825) 23 (10,719) 300 Balance at the end of current period .................................... 740 764 9,622 9,923

Total net assets ........................................................................ ¥ 124,481 ¥ 133,434 $ 1,616,645 $ 1,732,910


CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

20

CONSOLIDATED STATEMENTS OF CASH FLOWS

Hamamatsu Photonics K.K. and Consolidated SubsidiariesYearendedSeptember30,2010and2011

Millions ofJapanese Yen

Thousands ofU.S. Dollars (Note 1)

2010 2011 2010 2011

Operating activities:Income before income taxes and minority interests ........................ ¥ 16,145 ¥ 21,719 $ 209,681 $ 282,073 Depreciation and amortization ......................................................... 8,677 8,090 112,699 105,066 Increase in allowance for doubtful accounts .................................... 23 22 300 293 Increase in provision for bonuses .................................................... 584 313 7,593 4,069 Increase (decrease) in provision for retirement benefits .................. 748 (377) 9,721 (4,904)Interest and dividends income ......................................................... (275) (186) (3,580) (2,426)Interest expenses ............................................................................. 145 117 1,887 1,530 Foreign exchange losses (gains) ...................................................... 88 (3) 1,151 (49)Equity in earnings of affiliates .......................................................... (40) (51) (522) (662)Loss on retirement of property, plant and equipment ...................... 70 149 919 1,935 Gain on sales of property, plant and equipment .............................. (5) (0) (73) (4)Loss on valuation of investment securities ...................................... 18 272 235 3,536 Increase in notes and accounts receivable-trade ............................ (7,002) (1,535) (90,942) (19,947)Increase in inventories...................................................................... (1,262) (2,215) (16,394) (28,768)Increase in notes and accounts payable-trade ................................ 6,036 1,779 78,395 23,104 Other, net .......................................................................................... 822 1,012 10,680 13,148

Subtotal ...................................................................................... 24,774 29,105 321,753 377,994 Interest and dividends income received ........................................... 275 186 3,578 2,426 Interest expense paid ....................................................................... (145) (117) (1,887) (1,530)Income taxes (paid) refund ............................................................... 1,369 (8,756) 17,781 (113,720)Net cash provided by operating activities ........................................ 26,274 20,418 341,226 265,169

Investing activities:Net decrease (increase) in time deposits ......................................... 9,250 (23,756) 120,134 (308,520)Purchase of short-term investment securities ................................. (44,809) (10,000) (581,943) (129,870)Proceeds from sales of short-term investment securities ............... 32,839 28,500 426,482 370,129 Purchase of property, plant and equipment ..................................... (9,823) (6,162) (127,579) (80,026)Proceeds from sales of property, plant and equipment ................... 253 36 3,286 479 Purchase of intangible assets .......................................................... (424) (564) (5,508) (7,331)Collection of loans receivable .......................................................... 670 - 8,707 -Purchase of investments in subsidiaries .......................................... (895) - (11,632) -Other, net .......................................................................................... 4 (13) 58 (174)Net cash used in investing activities ................................................ (12,935) (11,959) (167,993) (155,313)

Financing activities:Net increase (decrease) in short-term loans payable ...................... 404 (1,073) 5,249 (13,945)Proceeds from long-term loans payable .......................................... 6,065 1,525 78,766 19,811 Repayment of long-term loans payable ........................................... (6,219) (243) (80,776) (3,159)Purchase of treasury stock ............................................................... (0) (0) (10) (8)Cash dividends paid ......................................................................... (2,017) (3,546) (26,194) (46,055)Other, net .......................................................................................... (88) (110) (1,145) (1,429)Net cash used in financing activities ................................................ (1,856) (3,448) (24,112) (44,786)

Effect of exchange rate change on cash and cash equivalents ..... (741) (711) (9,635) (9,245)Net increase in cash and cash equivalents ....................................... 10,740 4,298 139,484 55,823 Cash and cash equivalents at beginning of period .......................... 18,007 28,747 233,857 373,341 Cash and cash equivalents at end of period ..................................... ¥ 28,747 ¥ 33,045 $ 373,341 $ 429,165


Annual Report 2011

21

(a) Principles of ConsolidationThe consolidated financial statements as of and for the year ended September 30, 2010 included the accounts of the Company, five domestic subsidiaries and ten foreign subsidiaries in the United States of America, EU and People’s Republic of China, and those as of and for the year ended September 30, 2011 included the accounts of the Company, five domestic subsidiaries and twelve foreign subsidiaries. The Company has adopted the equity method of accounting for its investment in four affiliates for the years ended September 30, 2010 and 2011. 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. The Company provides the allowance for retirement benefits for directors and corporate auditors based on the internal corporate policy.

(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 ¥ 77 = US$1, the exchange rate prevailing on September 30, 2011. 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.

22


3. Comprehensive Income

The following table presents of comprehensive income for the year ended September 30, 2010:


Thousands of U.S. Dollars

2010 2010

Income before minority interests ¥ 11,545 $ 149,943

Other comprehensive incomeValuation difference on available-for-sale securities (143) (1,865)Foreign currency translation adjustment (1,473) (19,131)Share of other comprehensive income of associates accounted for using equity method (31) (406)Total other comprehensive income (1,648) (21,404)

Comprehensive income ¥ 9,897 $ 128,539

Comprehensive income attributable toComprehensive income attributable to owners of the parent 9,869 128,171 Comprehensive income attributable to minority interests 28 367

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, 2011 was 0.8%.Long-term debt at September 30, 2010 and 2011 was as follows:

Millions of Japanese Yen Thousands of U.S. Dollars2010 2011 2010 2011

Loans principally from banks due serially through 2026 ¥ 6,325 ¥ 7,607 $ 82,145 $ 98,797 Less current portion (132) (281) (1,719) (3,651)

¥ 6,192 ¥ 7,326 $ 80,426 $ 95,146

At September 30, 2010 and 2011, property, plant and equipment which had a carrying amount of ¥3,723 million (US$48,360 thousand) and ¥5,235 million (US$67,995 thousand) were pledged as collateral for short-term bank loans and long-term debt, respectively.

(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) Accounting ChangesEffective the year ended September 30, 2011, the Company adopted the Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No.25 issued on June 30, 2010). However, the consolidated statement of comprehensive income for the year ended September 30, 2010 is not presented. The comparative information for the year ended September 30, 2010 is disclosed in Note 3.

Annual Report 2011

23

5. Investment Securities

Information regarding the marketable securities classified as other securities as of September 30, 2010 and 2011 was as follows:

Millions of Japanese Yen Thousands of U.S. Dollars2010 2010

Cost Carrying amount

Unrealized gain

Unrealized loss Cost Carrying

amountUnrealized

gainUnrealized

lossEquity securities ¥ 1,274 ¥ 1,324 ¥ 49 - $ 16,557 $ 17,204 $ 646 -Other 20,000 20,000 - - 259,740 259,740 - -

¥ 21,274 ¥ 21,324 ¥ 49 - $ 276,298 $ 276,944 $ 646 -


Cost Carrying amount

Unrealized gain

Unrealized loss Cost Carrying

amountUnrealized

gainUnrealized

lossEquity securities ¥ 1,003 ¥ 1,175 ¥ 172 - $ 13,026 $ 15,262 $ 2,235 -Other 1,500 1,500 - - 19,480 19,480 - -

¥ 2,503 ¥2,675 ¥ 172 - $ 32,507 $ 34,742 $ 2,235 -

The information of available-for-sale securities which were sold during the year ended September 30, 2010 and 2011 was as follows:


Proceeds Unrealized gain

Unrealized loss Proceeds Unrealized

gainUnrealized

lossEquity securities - - - - - -Other ¥ 32,839 ¥ 48 ¥ 18 $ 426,482 $ 625 $ 241

¥ 32,839 ¥ 48 ¥ 18 $ 426,482 $ 625 $ 241


Proceeds Unrealized gain

Unrealized loss Proceeds Unrealized

gainUnrealized

lossEquity securities - - - - - -Other ¥ 28,500 - - $ 370,129 - -

¥ 28,500 - - $ 370,129 - -

The impairment losses on the marketable securities for the year ended September 30 2010 and 2011 were ¥18 million (US$235 thousand) and ¥271 million (US$3,531 thousand), respectively.

24


6. Retirement and severance benefitsThe 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 substantially all employees who meet the eligibility requirements. The Company has retirement benefit plan for directors and corporate auditors. The liability for which at September 30, 2010 and 2011 were ¥1,288 million (US$16,732 thousand) and ¥1,245 million (US$16,181 thousand), respectively.

The liability for employees’ retirement and severance benefits at September 30, 2010 and 2011 consisted of the following:


Projected benefit obligation ¥ (22,004) ¥ (21,974) $ (285,770) $ (285,380)

Fair value of plan asset 5,830 7,015 75,726 91,108

Unrecognized actuarial gain 1,908 1,807 24,787 23,478

Unrecognized prior service cost - (778) - (10,108)

¥ (14,264) ¥ (13,929) $ (185,255) $ (180,902)

The components of net periodic benefit cost for the year ended September 30, 2010 and 2011 were as follows:


Service cost ¥ 1,089 ¥ 1,044 $ 14,149 $ 13,568

Interest cost 395 397 5,135 5,161

Expected return on plan assets (111) (115) (1,450) (1,493)

Amortization of prior service cost - (86) - (1,123)

Amortization of actuarial gain or loss 287 317 3,731 4,117

¥ 1,660 ¥ 1,557 $ 21,566 $ 20,231

Assumptions used in calculation for the year ended September 30, 2010 and 2011 were as follows:

2010 2011

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

Amortization period of unrecognized actuarial differences 10 years 10 years

Annual Report 2011

25

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% for the year ended September 30, 2010 and 2011.

Significant components of deferred tax assets and liabilities at September 30, 2010 and 2011 were as follows:


Deferred tax assets:

Provision for retirement benefits ¥ 5,620 ¥ 5,483 $ 72,994 $ 71,217 Depreciation 1,515 1,700 19,686 22,089 Provision for bonuses 1,165 1,278 15,137 16,601 Unrealized gain on sales of inventories 827 1,175 10,744 15,268 Provision for directors' retirement benefits 511 495 6,649 6,430 Accrued business tax 443 402 5,754 5,222 Write down of investment securities 369 345 4,805 4,488 Impairment loss 339 339 4,403 4,403 Write down of inventories 255 315 3,315 4,096 Accrued expenses 215 225 2,795 2,932 Others 207 307 2,692 3,995 Less valuation allowance (1,496) (1,545) (19,437) (20,065)

Total deferred tax assets ¥ 9,974 ¥ 10,524 $ 129,540 $ 136,680 Amount set off against deferred tax liabilities (42) (55) (553) (715)

Net deferred tax assets ¥ 9,931 ¥ 10,469 $ 128,986 $ 135,965

Deferred tax liabilities

Reserve for special depreciation ¥ 36 ¥ 24 $ 469 $ 312 Asset corresponding to asset retirement obligations - 21 - 283 Others 156 168 2,026 2,188

Total deferred tax liabilities ¥ 192 ¥ 214 $ 2,495 $ 2,785 Amount set off against deferred tax assets (42) (55) (553) (715)

Net deferred tax liabilities ¥ 149 ¥ 159 $ 1,942 $ 2,070

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, 2010 and 2011 were as follows:

2010 2011Normal effective statutory tax rate for the Company 39.74 % 39.74 %

Tax credit (7.93) (3.13)Statutory tax rates variance of overseas subsidiaries (2.46) (2.00)Net changes in valuation allowance (0.61) 0.83 Expenses not deductible for income tax purposes 0.20 0.79 Other, net (0.45) 0.41

Actual effective tax rate 28.49 % 36.64 %

26


8. Segment Information

Effective the fiscal year ending September 30, 2011, “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Statement No. 17, issued by ASBJ on March 27, 2009) and the “Guidance on the Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No. 20, issued by ASBJ on March 21, 2008) have been applied.Segment information for the year ended September 30, 2010 has been restated in accordance with such accounting standards for comparative purpose.

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 YenReportable Segment

Others Total Adjustment Consolidated totalYear ended or as of September 30, 2011 Electron

tubeOpto-

semiconnductorImaging and

measurement instruments

Total

Net salesOutside customers ¥ 43,877 ¥ 43,271 ¥ 12,338 ¥ 99,486 ¥ 2,371 ¥ 101,858 - ¥ 101,858 Intersegment 1,285 723 78 2,088 551 2,639 (2,639) -

Total net sales 45,163 43,994 12,417 101,574 2,922 104,497 (2,639) 101,858 Segment income ¥ 17,338 ¥ 15,818 ¥ 1,501 ¥ 34,659 ¥ (260) ¥34,399 ¥ (12,569) ¥ 21,830

Assets ¥ 35,762 ¥ 33,962 ¥ 10,589 ¥ 80,314 ¥ 4,527 ¥ 84,841 ¥ 103,249 ¥ 188,091 Other items

Depreciation and amortization ¥ 2,793 ¥ 2,570 ¥ 845 ¥ 6,209 ¥ 251 ¥ 6,460 ¥ 1,546 ¥ 8,007 Increase in property, plant and equipment and intangible assets ¥ 3,173 ¥ 3,017 ¥ 601 ¥ 6,792 ¥ 161 ¥ 6,954 ¥ 1,580 ¥ 8,534

Year ended or as of September 30, 2010Net sales

Outside customers ¥ 39,358 ¥ 38,671 ¥ 10,931 ¥ 88,961 ¥ 1,997 ¥ 90,958 - ¥ 90,958 Intersegment 1,166 656 26 1,848 706 2,554 (2,554) -

Total net sales 40,524 39,327 10,958 90,809 2,703 93,513 (2,554) 90,958

Segment income ¥ 14,037 ¥ 12,094 ¥ 964 ¥ 27,097 ¥ (235) ¥ 26,862 ¥ (11,110) ¥ 15,751

Assets ¥ 34,944 ¥ 33,629 ¥ 10,483 ¥ 79,057 ¥ 4,556 ¥ 83,614 ¥ 92,792 ¥ 176,407 Other items

Depreciation and amortization ¥ 2,807 ¥ 3,163 ¥ 824 ¥ 6,796 ¥ 342 ¥ 7,138 ¥ 1,441 ¥ 8,580 Increase in property, plant and equipment and intangible assets ¥ 3,815 ¥ 3,817 ¥ 800 ¥ 8,433 ¥ 148 ¥ 8,581 ¥ 1,069 ¥ 9,650

Annual Report 2011

27

Thousands of U.S. DollarsReportable Segment

Others Total Adjustment Consolidated totalYear ended or as of September 30, 2011 Electron

tubeOpto-

semiconnductorImaging and

measurement instruments

Total

Net salesOutside customers $ 569,836 $ 561,962 $ 160,238 $ 1,292,037 $ 30,802 $ 1,322,839 - $ 1,322,839 Intersegment 16,698 9,397 1,022 27,118 7,158 34,276 (34,276) -

Total net sales 586,534 571,360 161,260 1,319,155 37,960 1,357,115 (34,276) 1,322,839

Segment income $ 225,181 $ 205,440 $ 19,502 $ 450,124 $ (3,378) $ 446,746 $ (163,235) $ 283,511

Assets $ 464,444 $ 441,069 $ 137,531 $ 1,043,046 $ 58,794 $ 1,101,840 $ 1,340,907 $ 2,442,747 Other items

Depreciation and amortization $ 36,283 $ 33,377 $ 10,978 $ 80,639 $ 3,266 $ 83,906 $ 20,084 $ 103,991 Increase in property, plant and equipment and intangible assets $ 41,217 $ 39,184 $ 7,811 $ 88,212 $ 2,102 $ 90,315 $ 20,527 $ 110,842

Year ended or as of September 30, 2010Net sales

Outside customers $ 511,149 $ 502,221 $ 141,971 $ 1,155,342 $ 25,942 $ 1,181,285 - $ 1,181,285

Intersegment 15,142 8,521 343 24,007 9,171 33,178 (33,178) -

Total net sales 526,292 510,742 142,314 1,179,350 35,113 1,214,463 (33,178) 1,181,285

Segment income $ 182,310 $ 157,076 $ 12,531 $ 351,918 $ (3,058) $ 348,859 $ (144,291) $ 204,567

Assets $ 453,828 $ 436,746 $ 136,150 $ 1,026,725 $ 59,175 $ 1,085,900 $ 1,205,100 $ 2,291,000

Other items

Depreciation and amortization $ 36,466 $ 41,085 $ 10,708 $ 88,260 $ 4,450 $ 92,711 $ 18,720 $ 111,431 Increase in property, plant and equipment and intangible assets $ 49,548 $ 49,574 $ 10,396 $ 109,519 $ 1,924 $ 111,444 $ 13,887 $ 125,331

Geographic Information


Year ended September 30, 2011 Japan North America Europe Asia Other Consolidated

totalSales ¥ 34,804 ¥ 27,258 ¥ 24,996 ¥ 14,387 ¥ 411 ¥ 101,858


Year ended September 30, 2011 Japan North America Europe Asia Other Consolidated

totalSales $ 452,009 $ 354,007 $ 324,626 $ 186,855 $ 5,340 $ 1,322,839

28


8. Segment Information (continued)Segment information for the year ended September 30, 2010 under the previous accounting standard:

Business segment


Year ended or as of September 30, 2010Opto-

electronic devices

Imaging and measurement instruments

Other Segment total Elimination or corporate

Consolidated total

Net salesOutside customers ¥ 79,287 ¥ 11,147 ¥ 523 ¥ 90,958 - ¥ 90,958 Intersegment 838 40 - 878 (878) -

80,126 11,187 523 91,837 (878) 90,958 Operating expenses 55,698 10,259 574 66,533 8,674 75,207 Operating income (loss) ¥ 24,428 ¥ 927 ¥ (50) ¥ 25,304 ¥ (9,553) ¥ 15,751

Assets ¥ 96,711 ¥ 15,913 ¥ 1,153 ¥ 113,777 ¥ 62,629 ¥ 176,407 Depreciation ¥ 6,292 ¥ 842 ¥ 40 ¥ 7,174 ¥ 1,441 ¥ 8,616 Capital expenditures ¥ 7,806 ¥ 812 ¥ 0 ¥ 8,620 ¥ 1,069 ¥ 9,689

Geographic areas

Millions of Japanese YenYear ended or

as of September 30, 2010 Japan North America Europe Other Segment total Elimination or

corporateConsolidated

totalNet sales

Outside customers ¥ 42,263 ¥ 26,409 ¥ 20,845 ¥ 1,440 ¥ 90,958 - ¥ 90,958 Intersegment 37,554 524 311 1,120 39,510 (39,510) -

79,817 26,934 21,157 2,560 130,469 (39,510) 90,958 Operating expenses 58,602 25,466 18,929 2,074 105,071 (29,864) 75,207 Operating income ¥ 21,215 ¥ 1,468 ¥ 2,228 ¥ 485 ¥ 25,397 ¥ (9,646) ¥ 15,751

Assets ¥ 99,153 ¥ 9,366 ¥ 9,270 ¥ 4,642 ¥ 122,432 ¥ 53,974 ¥ 176,407

Overseas sales


Year ended September 30, 2010 North America Europe Asia Other Consolidated

total

Overseas sales ¥ 25,379 ¥ 20,557 ¥ 12,334 ¥ 290 ¥ 58,562 Consolidated net sales ¥ 90,958 Ratio of overseas sales to consolidated net sales 27.90 % 22.60 % 13.56 % 0.32 % 64.38 %

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 22, 2011, 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, 2011:



Cash dividends ¥ 1,771 $ 23,008

Annual Report 2011

29

REPORT OF INDEPENDENT AUDITORS

30

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

Managing Director

Hitoshi Iida

Directors

Hirofumi UchiyamaTakashi Koike

Tadahiko ShimazuKenji Suzuki

Mitsutaka TakemuraTsutomu HaraKenji Yoshida

Soichiro Okudaira

Corporate Auditors

Masanori Matsui (Standing) Fumio Muramatsu (Standing)

Hajime ShibataniTakahiko Ijichi

Annual Report 2011

31

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: 31,095

Number of Employees: 4,188

Independent Auditors: Ernst & Young ShinNihon LLC Hamamatsu City, Shizuoka Prefecture Transfer Agent and Registrar: The Chuo Mitsui Trust and Banking Company Ltd. Minato-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)

2.4

2.6

2.8

3.0

3.2

3.4

3.8

3.6

10/10 11 12 1/11 2 3 4 5 6 7 8 9

Major shareholders Percentage to totalAs of September 30, 2011 shares outstanding(%)

Toyota Motor Corporation ............................................................................................................. 5.01 Hamamatsu Photonics K.K. employees ....................................................................................... 4.67 Japan Trustee Services Bank, Ltd. (Trust Account) ......................................................................4.15 The Master Trust Bank of Japan, Ltd. (Trust Account) ..................................................................4.10 Teruo Hiruma................................................................................................................................. 2.35 BBH for Matthews Asian Growth and Income Fund ..................................................................... 1.98 The Nomura Trust and Banking Co., Ltd. (Investment Trust)........................................................ 1.79 JP Morgan Chase Bank 385174 .................................................................................................... 1.50 State Street Bank Client Omnibus OM04 ..................................................................................... 1.44 The Chase Manhattan Bank, N.A. London Secs Lending Omnibus Account .............................. 1.42

CORPORATE DATA

32

PROFILE OF THE HAMAMATSU FAMILY AND SALES REPRESENTATIVES

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 Office11-18 Bldg., 188 South 4th Ring Rd. West,Fengtai District, Beijing 100070, ChinaTelephone:(86)10-6370-6370

Hangzhou Zheda Hamamatsu Photonics Science and Technology Co., Ltd.5F, 95 Baochu Road, Xihu District, Hangzhou 310059, ChinaTelephone:(86)571-8717-8237

Hakuto Enterprises Ltd. Units 709-712, 7/F, Miramar Tower,132 Nathan Road, Tsimshatsui, Kowloon, Hong KongTelephone: (852)2578-4921

Hakuto Taiwan Ltd.6F, No. 308Pa Teh Road, Sec. 2Taipei, Taiwan, R.O.C.Telephone: (886)2-8772-8910

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)36-5382123

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 officeScientific Park, 7, Rue du BosquetB-1348 Louvain-La-Neuve, 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 officeVyatskaya St. 27, bld. 13RU-127015 Moscow, RussiaTelephone: (7)495 258 85 18

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 Africa officePO Box 1112Buccleuch 2066Johannesburg, South AfricaTelephone: (27)11-802-5505

Annual Report 2011

33

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 200 (2nd Floor)6310 Greenwich Drive San Diego, CA 92122, U.S.A. Telephone: (1)858-210-6701

Midwest Sales OfficeSuite 202 - 2031410 Higgins Road,Park Ridge, IL 60068, U.S.A.Telephone: (1)847-825-8319

Northwest Sales OfficeSuite 213-214 & 411236 Huntington Ave.Boston, MA 02215, U.S.A. Telephone: (1)617-536-6441

Universal Spectrum Corporation250 Wood Ave.Middlesex, NJ 08846, U.S.A.Telephone: (1)732-805-1965

Koryo Electronics Co., Ltd.9F-7, No. 79, Sec. 1, Hsin Tai Wu Road,Hsi-Chih, Taipei, Taiwan, R.O.C.Telephone: (886)2-2698-1143

PhotonWealth Corp.4f., No 584, Rueiguang Rd., Neihu District,Taipei City 114, Taiwan R.O.C.Telephone: (886)-2-6606-1266

Sangki Corp.Suite 431, World Vision Bldg. 24-2, Yoido-Dong, Youngdeungpo-ku, Seoul, 150-877, KoreaTelephone: (82)2-780-8515

MoDoo Tek Co., Ltd.#1505 Seoul Forest Kolon Digital Tower, 308-4Sungsoo 2ga-1dong, Sungdong-gu, 133-827Seoul, KoreaTelephone: (82)10-4267-2902

Shinwoo Prime Co., Ltd#1001, CYLUX West Wing, 716, Suseo-Dong, Kangnam-Gu, Seoul, KoreaTelephone : (82)2-525-8082

Hakuto Singapore Pte. Ltd.Block 2, Kaki Bukit Ave. 1, No.04-01Kaki Bukit Industrial Estate,Singapore 417938Telephone : (65)6745-8910

Hakuto Thailand Ltd.16th Floor, Q. House Asoke Building,66 Sukhumvit 21 Road (Asoke), Klongtoey Nua,Wattana, Bangkok 10110 ThailandTelephone : (662)259-6244

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




325-6, Sunayama-cho, Naka-ku, Hamamatsu City 430-8587, JapanTelephone:81-53-452-2141, Fax:81-53-456-7889Homepage Address:http://www.hamamatsu.com

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