HORIBA Report 2019-2020
Financial Section
Consolidated Financial Review
Consolidated Financial Statements for
the Year Ended December 31, 2019, andIndependent Auditor’s Report

1

HORIBA, Ltd. (Consolidated)

Consolidated Balance Sheets
HORIBA, Ltd and Consolidated Subsidiaries

Thousands of

For the years ended December 31, 2018 and December 31, 2019

U.S. dollars
Millions of yen

ASSETS

12/2018(Note 1)

12/2019

12/2019

Current Assets:
Cash and cash equivalents (Note 4 and 5)¥62,837¥96,064$876,81624--

59,087

59,121

539,622

(682)

(796)

(7,265)Trade notes and accounts receivable (Note 4)
Affiliated companies
Other
Allowance for doubtful receivables
Marketable securities (Note 4 and 5)

1,899

1,998

18,236Inventories (Note 6)

55,13951,613471,093

Other current assets

9,586

8,551

78,048187,891

216,553

1,976,569

Land

13,692

15,177

138,526

Buildings and structures

55,89461,039557,128

Machinery, equipment and vehicles

24,78427,517251,159

Construction in progress

3,018

3,604

32,895

Other property, plant and equipment

17,72919,394177,017

Total Current Assets
Property, Plant and Equipment (Note 17):

Total
Accumulated depreciation
Net Property, Plant and Equipment

115,118

126,732

1,156,736(46,379)(50,803)(463,700)

68,73975,929693,035

8,314

10,571

96,485

44

40

365

4,636

3,605

32,904

-

13

118

(76)

(51)

(465)

Investments and Other Non-Current Assets:
Investment securities (Note 4 and 5)
Investments in nonconsolidated subsidiaries and affiliates (Note 4)
Deferred tax assets (Note 14)
Net defined benefit asset (Note 8)
Allowance for doubtful accounts

2,917

2,933

26,77015,836

17,114

156,206

901

1,254

11,445

Software

2,907

2,734

24,954

Other intangibles

1,092

1,546

14,110

Other investments and other assets
Total Investments and Other Non-Current Assets:
Intangibles:
Goodwill (Note 17)

Total Intangibles
Total Assets

2

4,901

5,535

50,520¥277,368¥315,133$2,876,350

HORIBA, Ltd. (Consolidated)Thousands of
U.S. dollars
Millions of yen

LIABILITIES AND NET ASSETS

12/2018(Note 1)

12/2019

12/2019

Current Liabilities:
Short-term loans (Note 4 and 7)
Current portion of long-term debt (Note 4 and 7)¥10,458¥8,099$73,922

1,735

16,069146,668

Trade notes and accounts payable (Note 4)
Affiliated companies
Other
Accounts payable - other (Note 4)

101

-

-

21,832

19,861

181,279

15,92016,164

147,535

Accrued income taxes (Note 4)

3,514

2,004

18,291

Advances received

17,475

19,169174,963

Accrued bonuses to employees

1,265

1,188

10,843

Reserve for product warranty

2,012

2,369

21,622Other current liabilities

3,681

3,545

32,35677,99788,472807,520

Long-term debt (Note 4 and 7)

32,322

49,720453,815

Deferred tax liabilities (Note 14)

184

613

5,595

1,946

2,017

18,410

640

-

-

2,258

2,692

24,57137,35255,044502,409

115,349

143,517

1,309,939

12,011

12,011

109,629

Capital surplus

18,717

18,599169,760

Retained earnings

132,329

141,689

1,293,254

Treasury stock - 362,304 shares at 12/2018 and 356,524 shares at 12/2019(1,428)(1,405)(12,824)

161,630

170,894

1,559,821

2,788

4,344

39,649(2)00(2,829)(4,042)(36,893)

Total Current Liabilities
Long-Term Liabilities:

Net defined benefit liability (Note 8)
Provision for loss on dissolution of the employees’pension fund (Note 8)
Other non-current liabilities
Total Long-Term Liabilities
Total Liabilities
Contingent Liabilities (Note 12)
Net Assets (Note 9):
Shareholders' Equity:
Common stock
Authorized - 100,000,000 shares
Issued and outstanding - 42,170,448 shares (excluding treasury stock) at 12/2018
Issued and outstanding - 42,176,228 shares (excluding treasury stock) at 12/2019

Total Shareholders' Equity
Accumulated Other Comprehensive Income:Net unrealized gains or losses on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments

(224)

(244)

(2,227)

(267)

58

529

Subscription Rights to Shares (Note 10)

549

651

5,941

Non-Controlling Interests

106

10

91

Remeasurements of defined benefit plans (Note 8)
Total Accumulated Other Comprehensive Income

Total Net Assets

162,018

171,615

1,566,401

Total Liabilities and Net Assets¥277,368¥315,133$2,876,350

See the notes to the consolidated financial statements.

3

HORIBA, Ltd. (Consolidated)

Consolidated Statements of Income
HORIBA, Ltd and Consolidated Subsidiaries

Thousands of

For the years ended December 31, 2018 and December 31, 2019

U.S. dollars
Millions of yen(Note 1)

12/2018

12/2019

12/2019¥210,570¥200,241$1,827,683

Cost of sales

120,630

117,624

1,073,603

Selling, general and administrative expenses

61,10061,701

563,170

Total Operating Costs and Expenses

181,731

179,325

1,636,774

28,83820,916

190,909

323

422

3,851

Net Sales (Note 17)
Operating Costs and Expenses (Note 17):

Operating Income (Note 17)
Other Income (Expenses):
Interest and dividend income
Interest expense

(440)

(496)

(4,527)

Foreign exchange gains (losses), net

(473)

(439)

(4,006)
1,031

Gain on sales of property, plant and equipment

537

113

Loss on sales of property, plant and equipment

(22)

-

-

Loss on disposal of property, plant and equipment

(76)

(44)

(401)

Subsidy income

11

43

392

Foreign tax refund

-

148

1,350

Bond issuance cost

-

(154)

(1,405)Gain on sales of investment securities (Note 5)

0

9

82

Gain on transfer of business

115

-

-

Gain on bargain purchase

48

-

-

-

137

1,250

56

78

711

Reversal of provision for loss on dissolutionof the employees' pension fund
Other, net
Total Other Income (Expenses), Net

79

(182)

(1,661)

28,917

20,734

189,247

Current

6,375

4,956

45,235

Deferred

203

268

2,446

Income before Income Taxes
Income Taxes (Note 14):

Total Income Taxes
Net Income
Profit Attributable to Non-Controlling Interests
Net Income Attributable to Owners of Parent

6,579

5,225

47,69022,33815,508

141,548

24

26

237

¥22,313¥15,481$141,301
U.S. dollars

Yen
12/2018(Note 1)
12/2019

12/2019

Per Share Information:
Net income - basic¥529.24¥367.09$3.35

Net income - diluted

526.98365.44

3.33

Cash dividends

145.00130.00

1.18

4

HORIBA, Ltd. (Consolidated)

Consolidated Statements of Comprehensive Income
HORIBA, Ltd and Consolidated Subsidiaries
For the years ended December 31, 2018 and December 31, 2019

Thousands of
U.S. dollars
Millions of yen
12/2018

Net Income(Note 1)

12/2019

12/2019¥22,338¥15,508$141,548(1,848)

1,555

14,193

Other Comprehensive Income (Note 16)
Net unrealized gains or losses on available-for-sale securities
Deferred gains or losses on hedges

(2)

3

27

(3,989)(1,220)(11,135)

Remeasurements of defined benefit plans

(133)

(20)

(182)

Total Other Comprehensive Income(5,973)

318

2,902

¥16,364¥15,827$144,459¥16,348¥15,807$144,277

16

19

173

Foreign currency translation adjustments

Comprehensive Income(Breakdown of comprehensive income)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests
See the notes to the consolidated financial statements.

5

HORIBA, Ltd. (Consolidated)

Consolidated Statements of Changes in Net Assets
HORIBA, Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2018 and December 31, 2019
Millions of yen
Shareholders' Equity

Accumulated Other Comprehensive Income
Net
Unrealized

Deferred

Gains

Gains

Foreign
Currency

CommonCapitalRetained

Treasury

or

or

Stock

Surplus

Earnings

Stock

Losses on

LossesTranslation

Available-on

Adjustments

for-sale

HedgesRemeasurements

Subscription

Non-

Net

of Defined

Rightscontrolling

Assets,Benefitto Shares

Interests

Total

Plans

Securities
Balance at the Beginning of Fiscal 2018...

¥12,011¥18,717¥115,345(¥1,488)¥4,636-¥1,151

(¥90)

¥492

¥90

¥150,866

Cash Dividends....................................

(5,311)(5,311)Net Income Attributableto Owners of Parent.............................

22,31322,313Purchase of Treasury Stock.................
Disposal of Treasury Stock..................

(0)

(0)

61

43

(17)

Net Changes in Items Other
than Shareholders’ Equity....................

(1,848)(2)(3,980)

(133)

56

16

(5,892)

Balance at the End of Fiscal 2018.............

¥12,011¥18,717¥132,329(¥1,428)¥2,788(¥2)(¥2,829)(¥224)¥549¥106¥162,018

Balance at the Beginning of Fiscal 2019¥12,011¥18,717¥132,329(¥1,428)¥2,788(¥2)(¥2,829)(¥224)¥549¥106¥162,018

Cash dividends.....................................

(6,115)(6,115)Net Income Attributableto Owners of Parents...........................

15,481

15,481

Purchase of Treasury Stock.................
Disposal of Treasury Stock..................

0

Purchase of Sharesof Consolidated Subsidiaries................

(118)

(0)

(0)

23

16

(6)

(118)

Net Changes in Items Other
than Shareholders’ Equity....................
Balance at the End of Fiscal 2019..........

¥12,011¥18,599¥141,689(¥1,405)

1,555

3(1,212)

(20)

102

(95)

332

¥4,344¥0(¥4,042)(¥244)¥651¥10¥171,615

Thousands of U.S. dollars (Note 1)
Shareholders' Equity

Accumulated Other Comprehensive Income
Net
Unrealized

Deferred

Gains

Gains

Foreign
Currency

CommonCapitalRetained

Treasury

or

or

Stock

Surplus

Earnings

Stock

Losses on

LossesTranslation

Available-on

Adjustments

for-sale

HedgesRemeasurements

Subscription

Non-

Net

of Defined

Rightscontrolling

Assets,Benefitto Shares

Interests

Total

Plans

Securities
Balance at the Beginning of Fiscal 2019 $109,629$170,837$1,207,822 ($13,033)$25,447($18)($25,821)($2,044)$5,010$967 $1,478,806

Cash Dividends....................................

(55,814)(55,814)

Net income Attributableto Owners of Parent.............................

141,301

141,301

Purchase of Treasury Stock.................
Disposal of Treasury Stock..................

0

Purchase of Sharesof Consolidated Subsidiaries................

(1,077)

(54)

(0)

(0)

209

146
(1,077)

Net Changes in Items Other
than Shareholders’ Equity....................
Balance at the End of Fiscal 2019..........

$109,629$169,760$1,293,254 ($12,824)

14,19327(11,062)

(182)

930

$39,649$0($36,893)($2,227)$5,941(867)$91 $1,566,401

See the notes to the consolidated financial statements.

6

3,030

HORIBA, Ltd. (Consolidated)

Consolidated Statements of Cash Flows
HORIBA, Ltd and Consolidated Subsidiaries

Thousands of

For the years ended December 31, 2018 and December 31, 2019

U.S. dollars
Millions of yen
12/2018(Note 1)

12/2019

12/2019

Cash Flows from Operating Activities:
Income before income taxes¥28,917¥20,734$189,247

Depreciation and amortization

7,240

8,794

80,266

(69)

105

958

Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in net defined benefit liability

(83)

1

9

Interest and dividend income

(323)

(422)

(3,851)
4,527

Interest expense

440

496

Foreign exchange losses (gains)

167

89

812

Loss (gain) on sales of property, plant and equipment

(514)

(113)

(1,031)

Loss on disposal of property, plant and equipment

76

44

401

Loss (gain) on sales of investment securities

(0)

(9)

(82)
(8,534)

Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in trade notes and accounts payable

(862)

(935)

(10,368)

2,852

26,031(596)(1,760)(16,064)

Other, net

4,976

3,196

29,171

Subtotal

29,00133,075

301,889

Interest and dividends received

305

434

3,961

Interest paid

(439)

(465)

(4,244)(9,331)(6,405)(58,461)

19,536

26,638243,136

Increase in time deposits(1,403)(2,418)(22,070)

Decrease in time deposits

1,202

3,018

27,54632--

Payments for purchase of marketable securities(2,200)(2,000)(18,254)

Proceeds from sales or redemption of marketable securities

1,701

1,900

17,342

Payments for purchase of property, plant and equipment(9,667)(11,762)(107,356)

Proceeds from sales of property, plant and equipment

1,420

262

2,391

Payments for purchase of intangibles(611)(1,172)(10,697)

Payments for purchase of investment securities

(24)

(24)

(219)

0

13

118

Income taxes (paid) refund
Net Cash Provided by (Used in) Operating Activities
Cash Flows from Investing Activities:

Decrease in time deposits restricted for use

Proceeds from sales or redemption of investment securities
Other, net
Net Cash Provided by (Used in) Investing Activities

7(1,481)(182)(1,661)(11,029)(12,367)(112,878)

HORIBA, Ltd. (Consolidated)Thousands of
U.S. dollars
Millions of yen
12/2018(Note 1)

12/2019

12/2019

Cash Flows from Financing Activities:
Net increase (decrease) in short-term borrowings

2,792

Proceeds from long-term borrowings(2,205)(20,125)

-

313

2,856

Repayments of long-term debt

(541)

(1,561)(14,247)

Repayments on finance lease obligations

(181)

(831)

(7,584)

Net decrease (increase) of treasury stock

(0)

(0)

(0)

(5,309)(6,110)(55,768)

Proceeds from issuance of bonds-

29,845

272,407

Dividends paid to non-controlling interests

-

(7)

(63)

-

(226)

(2,062)Net Cash Provided by (Used in) Financing Activities(3,240)19,215

175,383

Effect of Exchange Rate Changes on Cash and Cash Equivalents

(762)

(259)

(2,364)Net Increase (Decrease) in Cash and Cash Equivalents

4,503

33,227303,276

Cash dividends paid

Payments from changes in ownership interests in subsidiaries that do not
result in change in scope of consolidation

Cash and Cash Equivalents at Beginning of Year58,33362,837

573,539

Cash and Cash Equivalents at End of Year

¥62,837¥96,064$876,816

See the notes to the consolidated financial statements.

8

HORIBA, Ltd. (Consolidated)1. Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of HORIBA, Ltd. (“the Company”) have been
prepared in accordance with the provisions set forth in the Japanese Financial Instruments andExchange Law and its related accounting regulations and in conformity with accounting principles
generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as to applicationand disclosure requirements from International Financial Reporting Standards(“IFRS”). The accounts ofthe consolidated overseas subsidiaries have been prepared in accordance with either IFRS or U.S.
generally accepted accounting principles (“USGAAP”), with adjustments for the four specified items
as applicable. The accompanying consolidated financial statements have been restructured andtranslated into English, with some expanded descriptions, from the consolidated financial
statements of the Company prepared in accordance with Japanese GAAP and filed with theappropriate Local Finance Bureau of the Ministry of Finance as required by the Japanese Financial
Instruments and Exchange Law. Some supplementary information included in the statutory
Japanese language consolidated financial statements, but not required for fair presentation, is
not presented in the accompanying consolidated financial statements.
Yen amounts are rounded down to the nearest million. Therefore, total or subtotal amounts do notnecessarily correspond with the aggregate of the account balances.
The translation of the Japanese yen amounts into U.S. dollar amounts is included solely for theconvenience of readers outside Japan, using the prevailing exchange rate at December 31, 2019, whichwas ¥109.56 to U.S. $1.00. The translations should not be construed as representations that theJapanese yen amounts have been, could have been or could in the future be converted into U.S. dollars
at this or any other rate of exchange. The U.S. dollars amounts are then rounded down to the nearest
thousand.
Certain prior year amounts have been reclassified to conform to the current year's presentation.

2. Summary of significant accounting policies(a) Principles of consolidation
The consolidated financial statements include the accounts of the Company and 48 (48 in fiscal 2018)of its subsidiaries (“HORIBA” as a consolidated group). From fiscal 2019, stock purchased HORIBA
Tocadero GmbH(Germany) and newly established HORIBA (China) Co., Ltd. (China) have been
included in the scope of consolidation. Besides, MIRA North America Inc. (America) and MIRA do
Brasil Servicos de Engenharia Ltda. (Brazil) were liquidated.
The accompanying consolidated financial statements include the accounts of the Company andsignificant companies over which the Company has control through majority voting rights or certain
other conditions evidencing control by the Company. Significant intercompany transactions andaccounts have been eliminated in consolidation. In the elimination of investments in subsidiaries, theassets and liabilities of the subsidiaries, including the portions attributable to non-controllingshareholders, are evaluated using the fair value at the time the Company acquired control of therespective subsidiary. Acquisition costs that are in excess of the net assets of acquired subsidiaries
and affiliates and cannot be assigned to specific individual accounts are amortized on a straight-line
basis over five years.
December 31 is the year-end of the consolidated subsidiaries and that of the consolidated financial
statements for fiscal 2018 and fiscal 2019.
One subsidiary is not included in the consolidated accounts as the effect of its inclusion on total
assets, sales, income and retained earnings would have been immaterial.
The Company had no affiliated company in fiscal 2019 (one in fiscal 2018) due to sales of all of
shares.

9

HORIBA, Ltd. (Consolidated)

(b) Cash and cash equivalents
Cash and cash equivalents include cash on hand, readily available bank deposits and short-term
highly liquid investments that are readily convertible into cash, have insignificant risk of change invalue and have original maturities of three months or less from date of purchase.

(c) Securities
Available-for-sale securities with available fair market values are stated at fair market value.
Unrealized gains and losses on these securities are reported, net of applicable income taxes, as aseparate component of net assets. Realized gains and losses on the sale of such securities arecomputed using moving average cost. Available-for-sale securities with no available fair market value
are stated mainly at moving average cost.

(d) Inventories
Inventories are stated at the lower of average cost or net realizable value. Cost is determinedprincipally by the weighted average method for merchandise, finished goods and work-in-process andby the moving average method for raw materials and supplies.

(e) Property, plant and equipment and depreciation (except for leases)
Property, plant and equipment are stated at cost. Depreciation is computed by the straight-line method
over the estimated useful life of the asset. The estimated useful lives of buildings and structures range
from 3 to 60 years and those of machinery, equipment and vehicles from 2 to 20 years.

(f) Goodwill
Goodwill, which represents the excess of the purchase price over the fair value of the net assets
acquired, is amortized on a straight-line basis over a period of five years.

(g) Intangibles
Amortization of intangibles is computed by the straight-line method.
Computer software used by HORIBA is amortized over the estimated useful life of 3 to 10 years.

(h) Leases
With regard to leased assets under finance leases other than those that are deemed to transfer
ownership of the leased property to the lessee, the lease term is deemed to be the useful life, anddepreciation is computed by the straight-line method over the lease term with zero residual value.
The Company applied IFRS 16, “Leases” and FASB Accounting Standards Update (ASU) 2016-02,“Leases” for foreign subsidiaries from the fiscal year ended December 31, 2019. The standards requirea lessee to recognize assets and liabilities generally for all leases on the consolidated balance sheets.
The impact of this change on the consolidated balance sheets as of December 31, 2019 and theconsolidated statements of income and consolidated statements of comprehensive income for the year
ended December 31, 2019 was immaterial.

(i) Allowance for doubtful receivables
The Company and its domestic subsidiaries provide for doubtful accounts principally at an amountcomputed based on the actual ratio of bad debts in the past plus the estimated uncollectible amountsof certain individual receivables. The overseas subsidiaries provide for doubtful accounts based on
estimates made by management.
10

HORIBA, Ltd. (Consolidated)

(j) Accrued bonuses to employees
Accrued bonuses to employees are provided for the expected payment of employee bonuses to those
employees employed at the end of the fiscal year.

(k) Reserve for product warranty
The reserve for product warranty is provided for accrued warranty expenses for products of theCompany and certain subsidiaries. The provision is based on estimates made from actual pastexperience and product warranty records and takes into account individual cases.

(l) Accounting methods associated with retirement benefitsⅰ) Period-based method for estimated amount of retirement benefits
In calculating projected benefit obligations, the method used to attribute the estimated amount of
retirement benefits to the period up to the end of the current fiscal year is the benefit formula
method.
ⅱ) Recording of expenses for actuarial differences and prior service costs
Actuarial differences are recognized in expenses from the subsequent fiscal year using the straightline method over a fixed term of years (5 to 8 years), which is within the average of the estimatedremaining service years of employees.
Prior service costs are recognized in expenses using the straight-line method over a fixed term ofyears (10 years), which is within the average of the estimated remaining service years of employees,commencing in the period they arise.

(m) Sales and costs of completed construction
Sales and costs of completed construction are recorded using the percentage of completion method
when the progress of the construction up to the end of the year is deemed to be certain (estimates of
the ratio of completion of construction work are based on the cost-to-cost method). In the case ofother construction, sales and costs are recorded using the completed contract method.

(n) Foreign currency translation
Short-term and long-term receivables and payables in foreign currencies are translated into Japanese
yen based on exchange rates at the balance sheet date.
Balance sheet accounts of consolidated foreign subsidiaries are translated into Japanese yen at thebalance sheet date, except for shareholders’ equity accounts, which are translated at historical rates.
Revenue and expense accounts of consolidated foreign subsidiaries are translated into Japanese yen
at average annual exchange rates. Differences arising from the application of this process arepresented separately in the consolidated financial statements in “Foreign currency translation
adjustments” and “Non-controlling interests” in net assets.

(o) Derivatives
Derivative financial instruments are stated at fair value, and changes in the fair value are recognized
as gains or losses, unless the derivative financial instruments are used for hedging purposes.
HORIBA uses foreign currency exchange contracts to manage risk related to its importing andexporting activities. Regarding derivative transactions, in addition to conducting exchange agreementtransactions within the limit of the balance of foreign currency-denominated receivables and payables,
HORIBA conducts forward exchange agreement transactions for the expected foreign currencydenominated receivables and payables which would be generated with certainty by scheduled export
11

HORIBA, Ltd. (Consolidated)

or import trading. HORIBA uses derivative financial instruments, such as interest rate swap contracts
and interest rate and currency swap contracts, to avoid risks of fluctuations in interest rates andforeign exchange rates. Contracts are entered into and controlled by the finance department, which
reports results to the director. Transactions involving derivative contracts are limited to highly ratedbanking institutions, and HORIBA considers that there are no material credit risks associated with
them.

(p) Hedge accountingⅰ) Hedge accounting method
Deferred hedge accounting is applied. However, exceptional accounting treatment is applied tocertain interest rate and currency swap contracts which conform to the requirements of integral
accounting rules.
ⅱ) Hedging instruments and hedged items
Hedging instruments: Forward foreign exchange contracts, etc., and interest rate and currency
swap contracts
Hedged items: Foreign currency-denominated forecast transactions and foreign currencydenominated loans payableⅲ) Hedging policy
Forward foreign exchange transactions are used to avoid foreign currency risks and interest rateand currency swaps are used to avoid the risk of rising interest rates and foreign currency risks
based on the Company’s Administrative Rules.
ⅳ) Assessment of hedge effectivenessThe effectiveness of hedges is assessed by comparing the cumulative changes in the fair values ofboth hedging instruments and corresponding hedged items. However, an assessment ofeffectiveness is not conducted when the significant conditions of both hedging instruments andcorresponding hedged items are the same.

(q) Research and development expenses
Research and development expenses are charged to income when incurred. Research anddevelopment expenses charged to income for fiscal 2018 and fiscal 2019 were ¥15,183 million and¥16,254 million ($148,357 thousand), respectively.

(r) Income taxes
Income taxes comprise corporate tax, enterprise tax and prefectural and municipal inhabitant taxes.
HORIBA recognizes the tax effects of loss carryforwards and the temporary differences between the
carrying amounts of assets and liabilities for tax and financial reporting. The provision for current
income tax is computed based on the pretax income included in the consolidated statements ofincome.
The asset-liability approach is used to recognize deferred tax assets and liabilities for the expected
future tax consequences of temporary differences between the carrying amounts of assets andliabilities for financial reporting purposes and the amounts used for income tax purposes.
A s t h e C o m p a n y a p p l i e d “ P a r t i a l A m e n d m e n t s t o A c c o u n t i n g S t a n d a rd f o r T a x E f f e ct
Accounting” (ASBJ Statement No. 28; February 16, 2018), etc., from the current fiscal year ended
December 31, 2019, deferred tax assets are presented under investments and other assets anddeferred tax liabilities are presented under non-current liabilities.
As a result, deferred tax assets of current assets of ¥4,312 million were included in deferred tax
assets of investments and other non-current assets of ¥4,636 million in the consolidated balance
sheets for the previous consolidated fiscal year.

12

HORIBA, Ltd. (Consolidated)Deferred tax liabilities of ¥1 million in current liabilities was included in the ¥184 million in deferred tax
liabilities of long-term liabilities in the consolidated balance sheets for the previous consolidated fiscal
year.
The Company and its some consolidated subsidiaries have adopted a consolidated taxation system.

(s) Per share information
The computations of net income per share are based on the weighted average number of shares ofcommon stock outstanding during each period. The weighted average number of shares of common
stock used in the computation for fiscal 2018 and fiscal 2019 was 42,162 thousand and 42,174
thousand, respectively. Diluted net income per share of common stock assumes full conversion ofdilutive convertible bonds at the beginning of the year or at the later date of issuance, with anapplicable adjustment for related interest expense net of tax and dilutive stock option plans. The
weighted average number of shares used in the computation for fiscal 2018 and fiscal 2019 was
42,342 thousand and 42,364 thousand, respectively.
Cash dividends per share shown in the consolidated statements of income represent actual amounts
applicable to earnings in the respective fiscal year, including dividends to be paid after the end of theperiod.

3. Accounting standards issued but not yet effective- "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan ("ASBJ")
Statement No. 29, March 30, 2018 (hereinafter, "Statement No. 29"))- "Implementation Guidance on Accounting Standard for Revenue Recognition" (ASBJ Guidance No. 30,
March 30, 2018 (hereinafter, "Guidance No. 30"))(ⅰ) Overview
The International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards
Board (FASB) collaborated on a project to develop a single, comprehensive revenue recognition modeland jointly issued in May 2014 new revenue recognition standards, "Revenue from Contracts with
Customers" (IFRS 15 published by IASB, Topic 606 published by FASB). IFRS15 is effective for annual
reporting periods beginning on or after January 1, 2018, and Topic 606 is effective for annual reporting
periods beginning after December 15, 2017.
Considering the above circumstances, the Accounting Standard Board of Japan (ASBJ) also developed
new revenue recognition standards and issued Statement No. 29 together with Guidance No. 30.
ASBJ’s basic policy in developing the new revenue recognition standards was to first incorporate thecore principles of IFRS 15 in the light of improving the international comparability of financial statements
and then add additional alternative treatments to the extent that international comparability would not besignificantly impaired when business practices in Japan needed to be considered.
(ⅱ) Scheduled date of applying the new guidance
Effective from the beginning of the fiscal year ending December 31, 2022.
(ⅲ) The effects of application of the new guidance, etc.
The effects of the application on the consolidated financial statements are currently under consideration.

13

HORIBA, Ltd. (Consolidated)4. Financial instruments(1) Overview of financial instruments
Management policy
HORIBA carries out fund management with an emphasis on security and procures funds mainly
through bank borrowings and bond issuances. Derivatives are used to manage foreign exchange
fluctuation risk and interest rate fluctuation risk, and it is HORIBA's policy not to engage in
speculative transactions.
Financial instruments, risks and risk management
Trade notes and accounts receivable, which are operating receivables, are exposed to the credit riskof customers. HORIBA endeavors to reduce this risk by conducting due date control and balance
control and by attempting to promptly recognize collection concerns stemming from factors such as adeterioration in the financial condition of a customer. Most trade notes and accounts payable, which
are operating payables, have payment due dates within one year.
Some operating receivables and payables are denominated in foreign currencies and are exposed toforeign exchange fluctuation risk. However, HORIBA endeavors to reduce this risk by offsetting
foreign currency denominated operating receivables and payables and by using forward exchange
contracts, etc.
Marketable securities are mainly short-term investments with high liquidity such as negotiable
deposits. Investment securities are mainly shares of companies that have a business relationships
with HORIBA and are exposed to market value fluctuation risk. However, when acquiring or sellingshares of a certain value, the Board of Directors considers the details of the transactions, and
HORIBA endeavors to reduce any risk by ensuring that the market value information regarding theshares is reported to the management team in a timely manner. Short-term loans are mainly for
financing related to operating transactions, while long-term loans and corporate bonds are mainly for
financing related to plant and equipment and working capital. Trade liabilities and loans are exposed
to liquidity risk, but HORIBA endeavors to reduce this risk by using methods such as the preparationof cash flow plans.
Regarding derivative transactions, in addition to conducting exchange agreement transactions within
the limit of the balance of foreign currency-denominated receivables and payables, HORIBA
conducts forward exchange agreement transactions for the expected foreign currency-denominatedreceivables and payables which would be generated with certainty by scheduled export or importtrading. HORIBA uses derivative financial instruments, such as interest rate swap contracts andinterest rate and currency swap contracts, to avoid risks of fluctuations in interest rates and foreignexchange rates within the outstanding amount of borrowings. HORIBA's policy is not to engage in
speculative transactions.
Supplementary explanation of the estimated fair value of financial instruments
The market value of financial instruments includes values based on market prices and amounts
rationally calculated when there are no market prices available. As HORIBA incorporates variablefactors when making these calculations, the amounts may change due to the adoption of different
assumptions. With regard to contract amounts related to derivative transactions in the Notes toConsolidated Financial Statements item "Derivative transactions," the amounts do not indicate themarket risk associated with derivative transactions themselves.

14

HORIBA, Ltd. (Consolidated)(2) Fair value of financial instruments
The book value and fair value of financial instruments and any difference between the two as ofDecember 31, 2018 and December 31, 2019 are set forth in the table below. Financial instruments
whose fair value was extremely difficult to estimate are not included (See Note 2). Cash and cash
equivalents of ¥500 million and ¥1,080 million ($9,857 thousand) for the fiscal years ended December
31, 2018 and December 31, 2019, respectively, are included in (3) Marketable securities andinvestment securities.
Millions of yen

Assets:(1) Cash and Time Deposits.........................................
(2) Trade Notes and Accounts Receivable...................
(3) Marketable Securities and Investment Securities
Available-for-sale Securities..............................

Millions of yen

12/2018

12/2019

Book Value Fair Value DifferenceBook value Fair Value Difference¥63,632¥63,632-¥95,646¥95,646-

59,111

59,111-

59,121

59,121-

10,525

10,525-

13,464

13,464-

Total........................................................................ ¥133,269 ¥133,269-¥168,232¥168,232--¥19,861¥19,861-

Liabilities:(1) Trade Notes and Accounts Payable.......................
(2) Short-term Loans....................................................
(3) Accounts Payable - Other.......................................
(4) Accrued Income Taxes............................................
(5) Bonds, Including Current Portion............................
(6) Long-term Loans, Including Current Portion...........

¥21,933¥21,933

10,45810,458

-

8,099

8,099

-

15,92015,920-16,164

16,164

-

3,514

3,514

-

2,004

2,004

-

15,00015,122¥122

45,00044,848(¥151)

18,614

18,736

121

17,275

17,416

141

Total........................................................................

¥85,442¥85,687¥244¥108,405¥108,395(¥9)

Derivative Transactions................................................
(1) Hedge Accounting Not Applied...............................
(2) Hedge Accounting Applied......................................

¥28

¥28

-

(¥76)

(¥76)

-

(3)

(3)

-

1

1

-

Totall........................................................................

¥24

¥24

-

(¥75)

(¥75)

-

Thousands of U.S. dollars
12/2019
Book Value
Fair Value
Difference
Assets:(1) Cash and Time Deposits.......................................................................
(2) Trade Notes and Accounts Receivable..................................................
(3) Marketable Securities and Investment Securities..................................
Available-for-sale Securities.............................................................

$873,001
539,622$873,001
539,622-

Total.......................................................................................................

122,891$1,535,523

122,891$1,535,523-

Liabilities:(1) Trade Notes and Accounts Payable......................................................
(2) Short-term Loans...................................................................................
(3) Accounts Payable - Other......................................................................

$181,279
73,922
147,535$181,279
73,922
147,535-(4) Accrued Income Taxes...........................................................................
(5) Bonds, Including Current Portion...........................................................
(6) Long-term Loans, Including Current Portion..........................................
Total.......................................................................................................

18,291
410,733
157,676$989,457

18,291
409,346
158,963$989,366($1,378)
1,286
($82)

Derivative Transactions...............................................................................
(1) Hedge Accounting Not Applied...............................................................
(2) Hedge Accounting Applied.....................................................................
Total.......................................................................................................

($693)
9($684)($693)
9($684)-

15

HORIBA, Ltd. (Consolidated)

Note 1. Method for calculating the fair value of financial instruments and notes regarding securities andderivative transactions.
Assets(1) Cash and time deposits and (2) Trade notes and accounts receivable
As these are settled in the short term, market value approximates book value and is, therefore,
based on the applicable book value.
(3) Marketable securities and investment securities
Market value for these is based on prices on securities exchanges in the case of shares, etc. For
bonds, market value is based on prices on securities exchanges or prices indicated bycorresponding financial institutions. For marketable securities classified by the purpose for which
they are held, see Note 5.
Liabilities(1) Trade notes and accounts payable, (2) Short-term loans, (3) Accounts payable - other and (4)Accrued income taxes
As these are settled in the short term, market value approximates book value and is, therefore,
based on the applicable book value.
(5) Bonds, including current portion
Market value for bonds issued by HORIBA is calculated based on market prices.
(6) Long-term loans, including current portion
Borrowings based on variable interest rates reflect market interest rates, and as the creditworthinessof HORIBA has not changed significantly since execution, market value is considered to beapproximate book value and is, therefore, based on applicable book value. The value of borrowings
with fixed interest rates is based on the total amount of principal and interest discounted at aninterest rate of a similar new loan.
Derivative transactions
See Note 13 for derivative transactions.
Net receivables (payables) derived from derivative transactions are displayed in the table above. Total
net payables are shown in parenthesis.
Note 2. The following table summarizes financial instruments whose fair value was extremely difficult toestimate.
Thousands ofMillions of yen
12/2018

U.S. dollars

12/2019

12/2019

Non-listed Equity Securities......................................................................

¥188

¥185

$1,688Investments in Nonconsolidated Subsidiaries and Affiliates.....................

44

40

365

The above financial instruments were not included in "(3) Marketable securities and investment
securities" because they did not have market values and the fair value was extremely difficult toestimate.

16

HORIBA, Ltd. (Consolidated)

Note 3. Repayment schedule of monetary claims, available-for-sale securities with maturities andbonds held to maturity.
Millions of yen
12/2018
Within One Year

Over One Year

Over Five Years

but within Five Years but within Ten years

Over Ten Years

Cash and Time Deposits...............................................

¥63,632---

Trade Notes and Accounts Receivable.........................

59,111---(1) Governmental/Municipal Bonds...........................

-

-

-

-

(2) Corporate Bonds..................................................

-

-

-

-

(3) Other Bonds.........................................................

1,600

-

-

-

(4) Other....................................................................

800

¥19

-

-

Total...............................................................................

¥125,144

¥19

-

-

Marketable Securities and Investment Securities..........
Available-for-sale Securities with Maturities..............

Millions of yen
12/2019
Within One Year

Over One Year

Over Five Years

but within Five years but within Ten Years

Over Ten Years

Cash and Time Deposits...............................................

¥95,646---

Trade Notes and Accounts Receivable.........................

59,121---(1) Governmental/Municipal Bonds...........................

-

-

-

-

(2) Corporate Bonds..................................................

100

-

-

-

(3) Other Bonds.........................................................

1,900

-

-

-

(4) Other....................................................................

1,080

¥17

-

-

Total...............................................................................

¥157,848

¥17

-

-

Marketable Securities and Investment Securities..........
Available-for-sale Securities with Maturities..............

Thousands of U.S. dollars
12/2019
Within One Year

Over One Year

Over Five Years

but within Five Years but within Ten Years

Over Ten Years

Cash and Time Deposits...............................................

$873,001---

Trade Notes and Accounts Receivable.........................

539,622---(1) Governmental/Municipal Bonds...........................

-

-

-

-

(2) Corporate Bonds..................................................

912

-

-

-

(3) Other Bonds.........................................................

17,342---(4) Other....................................................................

9,857

$155

-

-

Total...............................................................................

$1,440,744

$155

-

-

Marketable Securities and Investment Securities..........
Available-for-sale Securities with Maturities..............

Note 4. Repayment schedule of short-term loans, bonds and long-term debt
See Note 7 for short-term loans and long-term debt.

17

HORIBA, Ltd. (Consolidated)5. Securities
The following table summarizes acquisition costs and book values (fair values) of available-for-salesecurities as of December 31, 2018 and December 31, 2019.
Millions of yen

Millions of yen

12/2018

12/2019

Book value

Acquisition
cost

DifferenceBook value

Acquisition
cost

Difference

Securities with Book Values Exceeding
Acquisition Costs:
Equity Securities....................................

¥8,076¥4,126¥3,949¥10,373¥4,188¥6,185Governmental/Municipal Bonds.............

-

-

-

-

-

-

Corporate Bonds....................................

-

-

-

-

-

-

Other Bonds...........................................

-

-

-

-

-

-

Other......................................................

500

500

0

1,000

1,000

0

Subtotal..................................................

8,576

4,626

3,949

11,373

5,188

6,185

Equity Securities....................................

43

52

(9)

10

15

(5)

Governmental/Municipal Bonds.............

-

-

-

-

-

-

Corporate Bonds....................................

-

-

-

99

100

(0)

Other Bonds...........................................

1,599

1,600

(0)

1,898

1,900

(1)

Securities with Book Values Not Exceeding
Acquisition Costs:

Other......................................................

306

307

(0)

81

82

(0)

Subtotal..................................................

1,949

1,959

(10)

2,090

2,098

(7)

Total............................................................

¥10,525¥6,586¥3,938¥13,464¥7,286¥6,177

Thousands of U.S. dollars
12/2019
Book value

Acquisition
cost

Difference

Securities with Book Values Exceeding
Acquisition Costs:
Equity Securities...................................................................................................

$94,678$38,225$56,453

Governmental/Municipal Bonds............................................................................

-

-

-

Corporate Bonds...................................................................................................

-

-

-

Other Bonds..........................................................................................................

-

-

-

Other.....................................................................................................................

9,127

9,127

0

Subtotal.................................................................................................................

103,806

47,35356,453

91

136

(45)

Securities with Book Values Not Exceeding
Acquisition Costs:
Equity securities....................................................................................................
Governmental/Municipal Bonds............................................................................

-

-

-

Corporate Bonds...................................................................................................

903

912

(0)

Other Bonds..........................................................................................................

17,323

17,342(9)

Other.....................................................................................................................

739

748

(0)

Subtotal.................................................................................................................

19,07619,149(63)

Total...........................................................................................................................

$122,891$66,502$56,380

18

HORIBA, Ltd. (Consolidated)

Note. Non-listed equity securities, etc., of ¥188 million and ¥185 million ($1,688 thousand) for the fiscal
years ended December 31, 2018 and December 31, 2019, respectively, are not included in the abovetable because they did not have market values and the fair value was extremely difficult to estimate.
The following table summarizes available-for-sale securities sold for the fiscal year ended December 31,
2018 and December 31, 2019.
Thousands ofMillions of yen

U.S.dollars

12/2018

12/2019

Total Sales of Available-for-Sale Securities

¥1

¥14

12/2019$127

Related Gains

0

9

82

Impairment loss on securities
HORIBA recognized no impairment loss in fiscal 2018 and 2019 on non-listed equity securities
categorized as available-for-sale securities. When applying impairment accounting, if the market value atthe end of the term has fallen by more than 50% from the acquisition price, an impairment loss is applied
to the entire amount. If the market value has fallen by approximately 30% to 50%, an impairment loss isapplied to the amount recognized as necessary after considering the possibility of recovery, etc.

19

HORIBA, Ltd. (Consolidated)6. Inventories
Inventories at December 31, 2018 and December 31, 2019 consisted of the following:Thousands ofMillions of yen

U.S. dollars

12/2018

12/2019

Merchandise and Finished Goods.................................................................

¥20,018¥19,995$182,502

Work-in-process............................................................................................

19,843

17,690161,464

Raw Materials and Supplies..........................................................................

15,276

13,927

127,117

Total.........................................................................................................

¥55,139¥51,613$471,09320

12/2019

HORIBA, Ltd. (Consolidated)7. Short-term loans and long-term debt
Short-term loans are generally represented by bank notes with annual interest rates ranging from 0.20%
to 8.75% and 0.20% to 7.35% at December 31, 2018 and December 31, 2019, respectively.
Long-term debt at December 31, 2018 and December 31, 2019 consisted of the following:Thousands of
U.S. dollars

Millions of yen
12/2018

12/2019

12/20190.609% Unsecured Bonds due in 2020.................................................

¥15,000¥15,000$136,9110.180% Unsecured Bonds due in 2026.................................................

-

15,000136,9110.270% Unsecured Bonds due in 2029.................................................

-

15,000136,911

18,614

17,275

157,676

443

3,514

32,07334,05865,790600,492

Current Portion.......................................................................................

(1,735)(16,069)(146,668)

Long-term Debt, Less Current Portion...................................................

¥32,322¥49,720$453,815

Loans from Banks due Serially from 2020 to 2026
at Rates from 0.09% to 9.40% Per Annum............................................
Lease Obligations Maturing Serially through 2029
at Rates from 1.00% to 16.08% Per Annum..........................................
Total..................................................................................................

The aggregate annual maturities of long-term debt outstanding at December 31, 2019 were as follows:
Thousands ofYear ending December 31
2020............................................................................................................................

Millions of yen

U.S. dollars¥16,069$146,668

2021............................................................................................................................

1,200

10,9522022............................................................................................................................

16,183

147,7092023............................................................................................................................

689

6,288

2024............................................................................................................................

472

4,308

Thereafter...................................................................................................................

31,174

284,538

Total.......................................................................................................................

¥65,790$600,492

21

HORIBA, Ltd. (Consolidated)

8. Employees' severance and pension benefits(1) Outline of adopted retirement pension fund
The Company and the domestic consolidated subsidiaries have adopted a funded defined benefit
pension plan (cash balance plan) and a defined contribution pension plan. Certain overseas
consolidated subsidiaries have adopted funded and unfunded defined benefit plans and a defined
contribution plan.
The Kyoto Machinery and Metal Employees' Pension Fund (a “general type") in which the Company
and a domestic consolidated subsidiary are participants received approval for dissolution from the
Minister of Health, Labour and Welfare as of September 20, 2017 and have carried out procedures forthe completion of liquidation. In the current fiscal year ended December 31, 2019, the Fund was
dissolved upon receipt of the notice of the settlement payment plan.
In the previous fiscal year ended December 31, 2018, the Company posted a provision for loss on
dissolution of the employees’ pension fund, of ¥640 million, that was estimated to arise from thedissolution. Following the determination of the payment amount on occasion of dissolution, ¥129
million ($1,177 thousand) out of the unpaid payment amount of ¥447 million ($4,079 thousand) wastransferred to accounts payable - other, and ¥318 million ($2,902 thousand) to other noncurrent
liabilities. The balance of ¥137 million ($1,250 thousand) between the determined amount and theamount of provision was posted as reversal of provision for loss on dissolution of the employees'
pension fund.

(2) Defined benefits plan(a) The changes in projected benefit obligation for the years ended December 31, 2018 andDecember 31, 2019 were as follows:
Thousands ofMillions of yen
12/2018
Balance at the Beginning of Year..........................................................

U.S. dollars

12/2019

12/2019¥10,314¥10,285$93,875

Service Cost....................................................................................

684

681

6,215

Interest Expense on Projected Benefit Obligation...........................

120

84

766

Actuarial Differences........................................................................

(397)

463

4,225

Benefits Paid....................................................................................

(228)

(428)

(3,906)

Other................................................................................................

(208)

(844)

(7,703)

Balance at the End of Year...................................................................

¥10,285¥10,241$93,473(b) The changes in pension assets for the years ended December 31, 2018 and December 31, 2019were as follows:
Thousands ofMillions of yen
12/2018

U.S. dollars

12/2019

12/2019

Balance at the Beginning of Year.........................................................

¥8,169¥8,339$76,113

Expected Return on Pension Assets...............................................

216

191

1,743

Actuarial Differences.......................................................................

(585)

247

2,254

Contributions from the Employer.....................................................

788

645

5,887

Benefits Paid...................................................................................

(182)

(357)

(3,258)Other...............................................................................................

(67)

(828)

(7,557)

Balance at the End of Year...................................................................

¥8,339¥8,237$75,18222

HORIBA, Ltd. (Consolidated)

(c) Reconciliation between the net defined benefit liability and the net defined benefit asset posted in
the consolidated balance sheets,and the balances of projected benefit obligation and pension assets
for the years ended December 31, 2018 and December 31, 2019 were as follows:
Thousands ofMillions of yen
12/2018

U.S. dollars

12/2019

12/2019

Funded Projected Benefit Obligation..............................................................

¥8,843¥8,637$78,833

Pension Assets.........................................................................................

(8,339)(8,237)(75,182)

503

400

3,650

Unfunded Projected Benefit Obligation...........................................................

1,442

1,604

14,640

Net Liability for Retirement Benefits in the Consolidated Balance Sheets.................

1,946

2,004

18,291Net Defined Benefit Liability........................................................................................

1,946

2,017

18,410Net Defined Benefit Asset...........................................................................................

-

(13)

(118)

Net Liability for Retirement Benefits in the Consolidated Balance Sheets..................

¥1,946¥2,004$18,291(d) The components of retirement benefits expense for the years ended December 31, 2018 andDecember 31, 2019 were as follows:
Thousands ofMillions of yen
12/2018
Service Cost..........................................................................................

U.S. dollars

12/2019

¥684

¥681

12/2019$6,215Interest Expense on Projected Benefit Obligation.................................

120

84

766

Expected Return on Pension Assets.....................................................

(216)

(191)

(1,743)

Amortization of Actuarial Differences....................................................

(13)

237

2,163

Retirement Benefits Expense................................................................

¥574

¥812

$7,411(e) The components of remeasurements of defined benefit plans (before tax effect) in the consolidated
statements of comprehensive income for the years ended December 31, 2018 and December 31,
2019 were as follows:
Thousands ofMillions of yen
12/2018

U.S. dollars

12/2019

12/2019

Actuarial Differences.............................................................................

(¥197)¥22$200

Total......................................................................................................

(¥197)¥22$200(f) The components of remeasurements of defined benefit plans (before tax effect) in the consolidatedbalance sheets as of December 31,2018 and December 31, 2019 were as follows:
Thousands ofMillions of yen
12/2018

12/2019

U.S. dollars
12/2019

Unrecognized Actuarial Differences.......................................................

(¥357)(¥334)($3,048)

Total.......................................................................................................

(¥357)(¥334)($3,048)

23

HORIBA, Ltd. (Consolidated)

(g) Pension assetsⅰ) The pension assets by major category as a percentage of total pension assets as of December
31, 2018 and December 31, 2019 were as follows:
12/2018

12/2019

Debt Investments.....................................................................................................................

50.6%

45.3%
23.0

Equity Investments..................................................................................................................

19.5

Mutual Funds (Note)................................................................................................................

15.1

15.5

Other........................................................................................................................................

14.8

16.2

Total..........................................................................................................................................

100.0%

100.0%

Note. Mutual funds primarily invest in debt investments.
ⅱ) Method of determining the expected rate of return on pension assets
The expected rate of return on pension assets is determined considering the current and anticipatedfuture portfolio of pension assets and, the long-term rates of return which are expected currently and in
the future from the various components of the pension assets.
(h) Assumptions used for the years ended December 31, 2018 and December 31, 2019 were as
follows:
12/2018

12/2019

Discount Rate (mainly)............................................................................................................

0.6-0.7%

0.5%

Expected Rate of Return on Pension Assets (mainly).............................................................

2.5%

2.5%

Expected Rate of Salary Raises (mainly)................................................................................

3.6-4.1%

3.5-3.9%

Note. A point system is used as the basis for the calculation of expected rates of salary raises.

(3) Defined contribution plan
Benefits expense for the defined contribution plan for the years ended December 31, 2018 andDecember 31, 2019 was ¥1,252 million and ¥1,318 million ($12,029 thousand), respectively.

24

HORIBA, Ltd. (Consolidated)9. Net assets
Under Japanese laws and regulations, the entire amount paid for new shares is required to be
designated as common stock. However, a company may, by a resolution of the Board of Directors,
designate an amount not exceeding one half of the price of the new shares as additional paid-in
capital, which is included in capital surplus.
Under the Japanese Corporate Law ("the Law"), in cases in which dividend distribution of surplus ismade, the smaller of an amount equal to 10% of the dividend or the excess, if any, of 25% of common
stock over the total of additional paid-in capital and legal earnings reserve must be set aside asadditional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained
earnings in the accompanying consolidated balance sheets.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under theLaw, all additional paid-in capital and all legal earnings reserve may be transferred to other capitalsurplus and retained earnings, respectively, which are potentially available for dividends. Both of theseappropriations generally require a resolution of the shareholder's meeting.
The maximum amount that the Company can distribute as dividends is calculated based on thenonconsolidated financial statements of the Company in accordance with Japanese laws andregulations.
At the Board of Directors' meeting held on February 14, 2020, the Board of Directors approved cash
dividends in the amount of ¥3,374 million ($30,795 thousand). The appropriation had not been
accrued in the consolidated financial statements as of December 31, 2019. Such appropriations arerecognized in the period in which they are approved by the Board of Directors.

25

HORIBA, Ltd. (Consolidated)10. Stock options(1) Expenses and items related to stock options
Thousands ofMillions of yen
12/2018
Selling, General and Administrative Expenses......................................

26

¥99

U.S. dollars

12/2019¥118

12/2019$1,077

HORIBA, Ltd. (Consolidated)(2) Scale and movement (fluctuation) of stock options
Information regarding stock options outstanding. The number of stock options is stated afterconversion into an equal number of shares.
(a) Details of stock options
Number of Shares
Persons Granted Options

by Type of Stock

Date of Grant(Note 1)
No 1 Stock-based

4 directors

Compensation Typeand 13 corporate officers

Stock Optionof the Company

No 2 Stock-based

4 directors

Compensation Typeand 14 corporate officers

Stock Optionof the Company

No 3 Stock-based

4 directors

Compensation Typeand 16 corporate officers

Stock Optionof the Company

No 4 Stock-based

4 directors

Compensation Typeand 16 corporate officers

Stock Optionof the Company

No 5 Stock-based

and 14 corporate officers

Compensation Typeof the Company, 2 directors

Stock Option

and 3 corporate officers

Common stock
54,200 shares
Common stock
26,400 shares
Common stock
31,000 shares
Common stock
28,200 shares

Vesting
Conditions

Service Period Exercise Period
April 17, 2009

April 16, 2009

(Note 2)

(Note 3)

toApril 16, 2039
April 24, 2010

April 23, 2010

(Note 2)

(Note 3)

toApril 23, 2040
April 22, 2011

April 21, 2011

(Note 2)

(Note 3)

toApril 21, 2041
April 25, 2012

April 24, 2012

(Note 2)

(Note 3)

toApril 24, 2042

4 directors
Common stock
33,200 shares

May 9, 2013
May 8, 2013

(Note 2)

(Note 3)toMay 8, 2043

of subsidiaries
5 directors
No 6 Stock-based

and 12 corporate officers

Compensation Typeof the Company, 3 directors

Stock Option

and 6 corporate officers

Common stock
27,500 shares

April 24, 2014
April 24, 2014

(Note 2)

(Note 3)

toApril 23, 2044

of subsidiaries
5 directors
No 7 Stock-based

and 13 corporate officers

Compensation Typeof the Company, 3 directors

Stock Option

and 8 corporate officers

Common stock
22,100 shares

May 9, 2015
May 8, 2015

(Note 2)

(Note 3)toMay 8, 2045

of subsidiaries
5 directors
No 8 Stock-based

and 14 corporate officers

Compensation Typeof the Company, 4 directors

Stock Option

and 9 corporate officers

Common stock
25,900 shares

May 11, 2016
May 10, 2016

(Note 2)

(Note 3)toMay 10, 2046

of subsidiaries
4 directors
No 9 Stock-based

and 16 corporate officers

Compensation Typeof the Company, 4 directors

Stock Option

and 8 corporate officers

Common stock
15,300 shares

May 10, 2017
May 9, 2017

(Note 2)

(Note 3)toMay 9, 2047

of subsidiaries
5 directors
No 10 Stock-based

and 19 corporate officers

Compensation Typeof the Company, 3 directors

Stock Option

and 8 corporate officers

Common stock
15,800 shares

May 9, 2018
May 8, 2018

(Note 2)

(Note 3)toMay 8, 2048

of subsidiaries
5 directors
No 11 Stock-based

and 18 corporate officers

Compensation Typeof the Company, 3 directors

Stock Option

and 9 corporate officers

Common stock
24,100 shares

April 20, 2019
April 19, 2019

(Note 2)

(Note 3)

toApril 19, 2049

of subsidiaries

Note 1. Stock options are convertible into an equal number of shares.
Note 2. Vesting conditions are not stipulated.
Note 3. The service period is not stipulated.
27

HORIBA, Ltd. (Consolidated)

(b) Number, movement and price of stock options
Stock options are convertible into an equal number of shares.
(ⅰ) Number of shares
Options before vesting

Options after vesting(number of shares)(number of shares)

Balance atBalance at

December 31, Granted Forfeited

Balance atBalance at

Vested December 31, December 31, Vested Exercised Forfeited December 31,

2018

2018

2019

2019

No. 1 Stock-based
Compensation Type

－

－

－

－

－

27,100

－

1,300

－

25,800

－

－

－

－

－

13,900－600－

13,300

－

－

－

－

－

17,200－600－

16,600

－

－

－

－

－

16,000－500－

15,500

－

－

－

－

－

20,500－600－

19,900

－

－

－

－

－

17,600－400－

17,200

－

－

－

－

－

14,500－500－

14,000

－

－

－

－

－

21,300－700－

20,600

－

－

－

－

－

14,100－300－

13,800

－

－

－

－

－

15,500－400－

15,100－24,100－24,100－－24,100－－24,100Stock Option
No. 2 Stock-based
Compensation Type
Stock Option
No. 3 Stock-based
Compensation Type
Stock Option
No. 4 Stock-based
Compensation Type
Stock Option
No. 5 Stock-based
Compensation Type
Stock Option
No. 6 Stock-based
Compensation Type
Stock Option
No. 7 Stock-based
Compensation Type
Stock Option
No. 8 Stock-based
Compensation Type
Stock Option
No. 9 Stock-based
Compensation Type
Stock Option
No. 10 Stock-based
Compensation Type
Stock Option
No. 11 Stock-based
Compensation Type
Stock Option

28

HORIBA, Ltd. (Consolidated)

(ⅱ) Price per share
Option Price

Weighted Average Stock PriceFair value at Grant date

(yen)

(yen)

(yen)

No 1 Stock-based
Compensation Type

1

6,510

1,091

1

6,510

2,628

1

6,510

2,208

1

6,510

2,245

1

6,510

2,988

1

6,510

2,739

1

6,510

3,598

1

6,510

3,116

1

6,510

5,795

1

6,510

6,435

1

－

4,923

Stock Option
No 2 Stock-based
Compensation Type
Stock Option
No 3 Stock-based
Compensation Type
Stock Option
No 4 Stock-based
Compensation Type
Stock Option
No 5 Stock-based
Compensation Type
Stock Option
No 6 Stock-based
Compensation Type
Stock Option
No 7 Stock-based
Compensation Type
Stock Option
No 8 Stock-based
Compensation Type
Stock Option
No 9 Stock-based
Compensation Type
Stock Option
No 10 Stock-based
Compensation Type
Stock Option
No 11 Stock-based
Compensation Type
Stock Option

29

HORIBA, Ltd. (Consolidated)

(3) Method to estimate the fair unit value of stock options
The grant date fair value of No. 11 Stock-based Compensation Type Stock Option in the year ended
December 31, 2019 was estimated using the Black-Scholes option pricing model as follows:
No. 11 Stock-based Compensation Type Stock Option
Stock Price Volatility (Note 1)

36.7%

Expected Remaining Period (Note 2)

15 Years

Expected Dividend (Note 3)¥145/share

Risk Free Interest Rate (Note 4)0.210%

Note 1. Stock price volatility was calculated based on actual weekly stock prices over 15 years (from theweek of April 19, 2004 to the week of April 15, 2019).
Note 2. As it was difficult to estimate the expected remaining period without sufficient relevant data, it
was determined to be exercised at the mid-point of the exercise period.
Note 3. Expected dividend was calculated by using the actual dividend paid for the year ended
December 31, 2018.
Note 4. Risk free interest rate represents the comparable compound interest rate of strip government
bonds whose remaining period corresponds to the expected remaining period of the stock options.

(4) Condition regarding the estimate of the fair unit value of stock options
Retirement from the office of director is condition necessary to exercise stock options, but continuous
employment is not. Accordingly, the initial number of stock options granted is used as an estimate of
the number of vested shares.

11. Leases
Finance leases which do not transfer ownership of the lease assets at December 31, 2018 andDecember 31, 2019 consisted of leases for buildings, machinery, office equipment and software. The
method of depreciation and amortization of lease assets is described in Note 2(h), "Summary ofsignificant accounting policies - Leases.

12. Contingent liabilities
Not applicable.

30

HORIBA, Ltd. (Consolidated)13. Derivative transactions
Derivative transactions for which hedge accounting was not applied at December 31, 2018 andDecember 31, 2019 were as follows:
Currency related:
Millions of yen

Millions of yen

12/2018

12/2019

Amount ofContract

Principal due

Amountover 1 Year

Fair

Gain

Contract

Value(Loss)

AmountAmount ofPrincipal due
over 1 Year

Fair

Gain

Value

(Loss)

Forwards
Selling
US dollar¥3,030

-

¥33

¥33

¥2,408

-

(¥6)

(¥6)

Euro

1,403

-

5

5

1,480

-

(32)

(32)

British pound

565

-

3

3

791

¥479

(35)

(35)

Other

282

-

(4)

(4)

290

-

(8)

(8)

-

-

-

-

-

-

-

-

Euro

59

-

(0)

(0)

6

-

0

0

British pound

319

-

(7)

(7)

125

-

6

6

Other

44

-

(0)

(0)

95

-

0

0

¥5,705

-

¥28

¥28

¥5,197

¥479

(¥76)

(¥76)

BuyingUS dollar

Total

Note. Fair value is determined by banking institutions.
Thousands of U.S. dollars
12/2019
Amount ofContract

Principal due

Amountover 1 Year

Fair

Gain

Value

(Loss)

Forwards
Selling
US dollar$21,978

-

($54)

($54)

Euro

13,508

-

(292)

(292)

British pound

7,219$4,372

(319)

(319)

Other

2,646

-

(73)

(73)

-

-

-

-

BuyingUS dollar
Euro
British pound
Other
Total

31

54

-

0

0

1,140

-

54

54

867

-

0

0

$47,435$4,372($693)($693)HORIBA, Ltd. (Consolidated)Derivative transactions for which hedge accounting was applied at December 31, 2018 and December
31, 2019 were as follows:
Currency related:
Millions of yen

Millions of yen

12/2018

12/2019

HedgedContract

Items

AmountAmount ofPrincipal due
over 1 Year

Fair

HedgedContract

Value

Items

AmountAmount ofPrincipal due
over 1 Year

Fair
Value

Forwards
BuyingEuro

Accounts

British pound

payable

Total

¥492

-

(¥2)

Accounts
payable

33

-

(0)

¥525

-

(¥3)

-

-

-

¥13

-

¥1

¥13

-

¥1

Note. Fair value is determined by banking institutions.
Thousands of U.S. dollars
12/2019
HedgedContract

Items

AmountAmount ofPrincipal due
over 1 Year

Fair
Value

Forwards
BuyingEuro

Accounts---

British pound

payable

$118

-

$9

$118

-

$9

Total

Interest rate currency related:
Millions of yen

Millions of yen

12/2018

12/2019

HedgedContract

Items

AmountAmount ofPrincipal due
over 1 Year

Fair

HedgedContract

value

Items

AmountAmount ofPrincipal due
over 1 Year

Fair
Value

Exceptional Accounting for Interest Rate and Currency Swaps
Interest Rate and Currency
Swap Contracts
Fixed Rate Payments
and Variable Rate Receipts
Receiving in US dollar
and Paying in Japanese yen

Long-termLong-term
loans¥15,120¥15,120

Note

loans

¥15,120¥15,120

Note

Thousands of U.S. dollars
12/2019
HedgedContract

Items

AmountAmount ofPrincipal due
over 1 Year

Fair
Value

Exceptional Accounting for Interest Rate and Currency Swaps
Interest Rate and Currency
Swap Contracts
Fixed Rate Payments
and Variable Rate Receipts
Long-term

Receiving in US dollar

loans

and Paying in Japanese yen$138,006$138,006

Note

Note. Interest rate and currency swap contracts subject to exceptional accounting treatment (special
treatment and allocation treatment) are accounted for together with long-term loans as hedged items.
Accordingly, their fair values are included in the fair values of long-term loans.
32

HORIBA, Ltd. (Consolidated)14. Income taxes
The Company is subject to a number of taxes based on income, which, in the aggregate, indicate astatutory income tax rate in Japan of approximately 30.8% and 30.5% for the years ended December 31,
2018 and December 31, 2019, respectively.
The following table summarizes the significant differences between the statutory tax rate and HORIBA's
effective tax rate for financial statement purposes for the years ended December 31, 2018 andDecember 31, 2019.
12/2018

12/2019

30.8%

30.5%

Statutory Tax Rate............................................................................................................................
Expenses not Qualifying for Permanent Deduction e.g. Entertainment Expenses.....................

0.4

0.1

Nontaxable Dividend Income........................................................................................................

(0.0)

(0.0)

Per Capita Inhabitants Tax............................................................................................................

0.2

0.2

Increase/Decrease in Valuation Allowance for Deferred Tax Assets............................................

(0.5)

(0.8)

Foreign Subsidiaries and the Company....................................................................................

(1.5)

(1.5)

Tax Credits....................................................................................................................................

(5.0)

(4.8)

Reduction in Deferred Tax Assets by the Changes in Tax Rates.................................................

0.1

(0.0)

Other.............................................................................................................................................

(1.7)

1.5

Effective Tax Rate.............................................................................................................................

22.8%

25.2%

Differences in Tax Rates between

Significant components of HORIBA's deferred tax assets and liabilities at December 31, 2018 andDecember 31, 2019 were as follows:
Thousands ofMillions of yen
12/2018

U.S. dollars

12/2019

12/2019

Deferred Tax Assets
Accrued Enterprise Tax............................................................................

¥209

¥131

$1,195

Loss on Write-down of Inventory..............................................................

967

1,045

9,538

Allowance for Doubtful Receivables.........................................................

124

93

848

Accrued Bonuses.....................................................................................

232

314

2,866

Loss Carryforwards..................................................................................

767

656

5,987

Unrealized Gains.....................................................................................

2,016

1,900

17,342

Net Defined Benefit Liability.....................................................................

456

481

4,390

Depreciation.............................................................................................

448

382

3,486

Loss on Valuation of Investment Securities.............................................

111

111

1,013

Loss on Impairment of Fixed Assets........................................................

136

100

912

Provision for Loss on Dissolution of the Employees’ Pension Fund........

195

-

-

Effects of Changes in Accounting Policies...............................................

94

-

-

Offsetting Deferred Tax Assets and Liabilities.........................................

(2,664)(3,386)(30,905)

Other........................................................................................................

2,915

2,944

26,871

Total Deferred Tax Assets...........................................................................

6,014

4,776

43,592

Valuation Allowance....................................................................................

(1,378)(1,170)(10,679)

Net Deferred Tax Assets.............................................................................

4,636

3,605

32,904

Unrealized Losses....................................................................................

(390)

(446)

(4,070)

Unrealized Gains (Losses) on Available-for-sale Securities....................

(1,149)(1,833)(16,730)

Effects of Changes in Accounting Policies...............................................

(95)

-

-

Offsetting Deferred Tax Assets and Liabilities.........................................

2,664

3,386

30,905

Deferred Tax Liabilities

Other........................................................................................................

(1,213)(1,720)(15,699)

Total Deferred Tax Liabilities.......................................................................

(184)

(613)

(5,595)

Net Deferred Tax Assets.............................................................................

¥4,451¥2,992$27,309

33

HORIBA, Ltd. (Consolidated)15. Impairment loss
Not applicable.

16. Consolidated statement of comprehensive income
Components of other comprehensive income for the years ended December 31, 2018 and December 31
2019 consisted of the following:Thousands ofMillions of yen
Net Unrealized Gains or Losses on Available-for-sale Securities:

12/2018

U.S. dollars

12/2019

12/2019

Increase (Decrease) during the Year.............................................................................

(¥2,659)¥2,238$20,427

Reclassification Adjustment..........................................................................................

(0)

-

-

Subtotal, before Tax......................................................................................................

(2,659)2,238

20,427Tax (Expense) or Benefit...............................................................................................

811

(683)

(6,234)

Subtotal, Net Tax............................................................................................................

(1,848)

1,555

14,193

Increase (Decrease) during the Year.............................................................................

(6)

(5)

(45)

Reclassification Adjustment..........................................................................................

2

10

91

Subtotal, before Tax......................................................................................................

(3)

4

36

Tax (Expense) or Benefit...............................................................................................

1

(1)

(9)

Subtotal, Net Tax............................................................................................................

(2)

3

27

(3,989)(1,220)(11,135)

(183)

(215)

(1,962)

Reclassification Adjustment..........................................................................................

(13)

237

2,163

Subtotal, before Tax......................................................................................................

(197)

22

200

Tax (Expense) or Benefit...............................................................................................

63

(43)

(392)

Deferred Gains or Losses on Hedges

Foreign Currency Translation Adjustments
Increase (Decrease) during the Year.............................................................................
Remeasurements of Defined Benefit Plans
Increase (Decrease) during the Year.............................................................................

Subtotal, Net Tax............................................................................................................

(133)

(20)

(182)

Total Other Comprehensive Income.........................................................................

(¥5,973)¥318$2,902

34

HORIBA, Ltd. (Consolidated)17. Segment information
General information regarding reportable segments(1) Calculation method for reportable segments
HORIBA's reportable segments are components of the Company about which separate financial
information is available and that are evaluated regularly by the management in deciding how to allocate
resources and in assessing performance. The Company has established the segment strategy office foreach product and service at its headquarters. The office constructs a comprehensive plan for Japan andoverseas markets for business development.
The Company thus is composed of business segments by product and service that are determined at
the head office. The Automotive Test Systems, Process & Environmental Instruments & Systems,
Medical-Diagnostic Instruments & Systems, Semiconductor Instruments & Systems and Scientific
Instruments & Systems comprise the Company’s five reportable segments.
Major products and services of each segment are described below.
(a) Automotive Test Systems
Emission Measurement Systems, Automotive Emission Analyzers, On-Board Emission Measurement
Systems, Driveline Test Systems, Engine Test Systems, Brake Test Systems, Fuel Cell Test Systems,
Battery Test Systems, Vehicle Development Engineering, Testing Engineering, Lease andManagment of R&D Facilities(b) Process & Environmental Instruments & Systems
Stack Gas Analyzers, Water Quality Analysis and Examination Systems, Air Pollution Analyzers,
Environmental Radiation Meters, Process Measurement Equipment(c) Medical-Diagnostic Instruments & Systems
Hematology Analyzers, Immunology Analyzers, Clinical Chemistry Analyzers, Blood Glucose
Analyzers(d) Semiconductor Instruments & Systems
Mass Flow Controllers, Chemical Concentration Monitors, Reticle/Mask Particle Detection Systems,
Residual Gas Analyzers(e) Scientific Instruments & Systems
pH Meters, Particle-Size Distribution Analyzers, X-Ray Fluorescence Analyzers, Elemental Analyzers,
Raman Spectrometers, Fluorescence Spectroscopy/ Fluoresence Lifetime Spectroscopy, Optical
Components; Spectrometers and Detectors, Gratings(2) Method of measurement regarding income (loss), assets and other material items by reportablesegment
The accounting methods applied for reportable segments are identical with those stated in Note 2,"Summary of significant accounting policies." Income for each reportable segment is the amount basedon operating income.
As of starting from the fiscal year 2019, HORIBA applied the Partial Amendments to AccountingStandards for Tax Effect Accounting (ASBJ Statement No. 28, February 16, 2018). These accounting
standards have been applied retroactively for figures prior to the fiscal year 2018.

35

HORIBA, Ltd. (Consolidated)

(3) Information regarding income (loss), assets and other material items by reportable segment
Millions of yen
12/2018
Automotive

Process &Environmental

MedicalDiagnostic

Semiconductor¥79,656¥19,361¥26,012¥57,785

Scientific

Adjustment

Consolidated

Sales
Sales to Outside Customers............

¥27,754-¥210,570

Intersegment Sales and Transfers...

-

-

-

-

-

-

-

Total.................................................

79,656

19,361

26,012

57,78527,754-

210,570

Segment Income (Loss)......................

¥7,702¥2,027¥1,823¥17,063¥221-¥28,838

Segment Assets..................................

¥83,218¥16,594¥22,990¥53,889¥22,742¥77,932¥277,368

Depreciation.....................................

3,059

484

1,166

1,659

750

-

7,120

Amortization of Goodwill..................

51

-

-

-

68

-

120

Increase in Tangible
and Intangible Fixed Assets.............

4,072

888

1,138

2,395

1,745

-

10,239Other Items:

Millions of yen
12/2019
Automotive

Process &Environmental

MedicalDiagnostic

Semiconductor

Scientific

Adjustment

Consolidated

Sales
Sales to Outside Customers............

¥81,042¥19,500¥25,335¥47,191¥27,170-

Intersegment Sales and Transfers...

-

-

-

-

-

-

¥200,241-

Total.................................................

81,042

19,50025,33547,191

27,170-200,241

Segment Income (Loss)......................

¥6,454¥1,697¥1,302¥10,727¥734-¥20,916

Segment Assets..................................

¥87,981¥16,728¥25,549¥48,397¥23,392¥113,084¥315,133

Depreciation.....................................

3,829

574

1,332

1,896

851

-

8,485

Amortization of Goodwill..................

199

16

-

-

93

-

309

Increase in Tangible
and Intangible Fixed Assets.............

6,290

1,009

2,478

1,825

1,231

-

12,834

Other Items:

Thousands of U.S. dollars
12/2019
Automotive

Process &Environmental

MedicalDiagnostic

Semiconductor

Scientific

Adjustment

Consolidated

Sales
Sales to Outside Customers............

$739,704$177,984$231,243$430,732$247,991-$1,827,683

Intersegment Sales and Transfers...

-

-

-

-

-

-

1,827,683

Total.................................................

739,704

177,984

231,243

430,732

247,991-

Segment Income (Loss)......................

$58,908$15,489$11,883$97,909$6,699-$190,909

Segment Assets..................................

$803,039$152,683$233,196$441,739$213,508$1,032,165$2,876,350

Depreciation.....................................

34,948

5,239

12,157

17,305

7,767-

77,446

Amortization of Goodwill..................

1,816

146

-

-

848

-

2,820

Increase in Tangible
and Intangible Fixed Assets.............

57,411

9,209

22,617

16,657

11,235-

117,141

Other Items:

Note 1. Details of adjustment amounts are as follows:(1) Unallocated amounts to be included in the adjustment amount of segment income were notgenerated.
(2) The adjustment amounts of ¥77,932 million and ¥113,084 million ($1,032,165 thousand) ofsegment assets for the years ended December 31, 2018 and December 31, 2019, respectively,
represent corporate assets that are not allocated to any business segment. They include cash
and cash equivalents, short-term investments, investment securities, idle land, etc.
Note 2. Depreciation and increase in tangible and intangible fixed assets include long-term prepaid
expenses and the amount of amortization associated with the expenses.
36

HORIBA, Ltd. (Consolidated)<Related Information>
1. Information regarding geographic areas(1) Net sales
Thousands ofMillions of yen
12/2018

U.S. dollars

12/2019

12/2019

Japan................................................................................................................................

¥65,986¥62,169$567,442

U.S....................................................................................................................................

28,673

26,510241,967

China.................................................................................................................................

27,832

27,552

251,478

Europe..............................................................................................................................

45,00644,532406,462

Asia...................................................................................................................................

38,461

34,907

318,610

Others................................................................................................................................

4,610

4,569

41,703

Total...................................................................................................................................

¥210,570¥200,241$1,827,683

Note 1. Net sales are categorized by country or geographic area based on the location of the customer.
Note 2. The "Asia" amount is that of the Asian region other than China.
(2) Property, plant and equipment
Thousands ofMillions of yen
12/2018

U.S. dollars

12/2019

12/2019

Japan.................................................................................................................................

¥31,329¥32,436$296,056

U.S....................................................................................................................................

8,103

8,097

73,904

U.K....................................................................................................................................

12,575

14,948

136,436

Others................................................................................................................................

16,73020,447

186,628

Total...................................................................................................................................

¥68,739¥75,929$693,035

2. Information regarding major customers
There were no customers who represented more than 10% of the consolidated sales.
3. Information regarding impairment loss on fixed assets by reporting segment
Not applicable.
4. Information regarding the amortized amount and unamortized balance of goodwill by reporting
segment
Thousands ofMillions of yen
12/2018

U.S. dollars

12/2019

12/2019

Automotive Test Systems.................................................................................................

¥807

¥700

$6,389Process & Environmental Instruments & Systems...........................................................

-

226

2,062

Scientific Instruments & Systems.....................................................................................

93

327

2,984

Total..................................................................................................................................

¥901¥1,254$11,445

Note. Information regarding the "Amortized amount of goodwill" is omitted as similar information isdisclosed in "Segment Information."
5. Information regarding gain on bargain purchase by reporting segment
Information regarding the "gain on bargain purchase by reporting segment" is omitted because of its
immateriality in fiscal 2018. In fiscal 2019, it was not recognized.

37

HORIBA, Ltd. (Consolidated)18. Related party transactions
Not applicable.

19. Subsequent events
Not applicable.

38

HORIBA, Ltd. (Consolidated)

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HORIBA, Ltd. (Consolidated)