April 2006 March 2007 Financial Report | IRライブラリー | 株主・投資家の皆様へ | アマノ

(1)

FINANCIAL REPORT

April 2006 March 2007

(2)

1. Basic Management Policy

Throughout its history, Amano has adhered to a basic policy of putting the customer first. This has meant paying heed to what its customers say, based on the corporate themes of “people and time” and “people and the environment,” and giving pivotal importance to customer satisfaction throughout its business activities, particularly in sales, production, and development activities.

In accordance with this fundamental policy, Amano continues to undertake business activities with the goal of earning the trust and high regard of all those who support it: customers, employees, shareholders, suppliers and other entities with which it does business, and the local community. It achieves this by providing a variety of products, systems, services, and solutions that match the needs of customers in relation to the themes of “people and time” and “people and the environment.”

Amano and its Group companies direct their efforts towards maximizing corporate value by fostering innovation in management and by ensuring a strong earnings structure and sustained growth in business performance.

2. Basic Policy on Distribution of Profits, and Dividend for This and Next Term

For Amano, one of the issues to which it devotes most importance is its policy for dividends to shareholders. Fundamental to this is its policy for the return of profit to shareholders, based on maintaining a stable ordinary dividend of ¥26 annually (¥13 interim and ¥13 year-end), together with appropriate results-based distributions and flexible purchasing of treasury stock.

For dividends it was decided to change to a criterion of maintaining a payout ratio of at least 35% on a consolidated basis, as of the previous term. In addition, the Company’s medium-term goal is to maintain a ratio of dividend to net assets of at least 2.5%. In line with this policy, we plan to pay a year-end dividend for the year of ¥17 per share, which constitutes an increase of ¥4 from the ¥13 paid as the previous year-end dividend, and reflects the Company's business performance. As a result, the annual dividend will be ¥30, including the ¥13 per share paid as the interim dividend, which corresponds with a payout ratio of 40.4% on a consolidated basis, and a 3.0% ratio of dividends to net assets.

Retained earnings will be used to fund effective investment aimed at the fundamental enhancement of the Company’s capacity to conduct its business operations. This will include the expansion and strengthening of existing business fields, strategic investment in growth fields, and spending on research and development, as well as the ra- tionalization of production plant and equipment for the purpose of reducing costs and further improving product quality.

Management Policy

(3)

3. Medium- and Long-Term Management Strategy and Targeted Management Indicators

Amano and its Group companies each continue the tradition of evolving continuously in response to changes in the times, while maintaining the following four immutable strategies of the Amano Group.

(1) Emphasis on Time & Ecology business fields, and enhancement of core business (2) Being a niche leader in the business fields in which we excel

(3) Constant restructuring

(4) Management based on cash flow

Based on these four fundamental strategies, in April 2005 Amano inaugurated its third three-year medium-term management plan.

With regard to business results in the year under review, the second year of the plan, net income fell slightly below the plan target, at 99.4%, but most of the second-year plan targets were met.

The details are set out below.

Amano is targeting the following management indicators for its consolidated results in the medium to long term.

(1) Consolidated operating profit to sales: 13% or more (2) ROE: 8.5%

(3) Earnings per share: ¥88 or more

Kaoru Haruta President and CEO

Consolidated management targets (Millions of yen)

Year ending March 2007 - (Plan) Year ended March 2007 - (Actual) Year ending March 2008 - (Plan) Amount YOY Change (%) Amount YOY Change (%) Amount YOY Change (%)

Net sales 84,000 5.3 85,769 7.6 91,000 6.1

Operating profit 10,100 5.9 10,144 6.4 10,700 5.5

Operating profit to sales 12.0% 11.8% 11.8%

Ordinary profit 10,000 4.4 10,206 6.5 10,800 5.8

Net profit 6,000 1.4 5,961 0.8 6,300 5.7

(4)

Analysis of Business Results

During the year under review, there was a continued improvement in corporate earnings and growth in capital investment in the Japanese economy, buoyed by expansion in economies over seas and by the relaxed monetary environment do- mestically. The economy held firm during the year, backed by these and other factors such as a mod- est uptrend in employee incomes, which caused consumer spending to remain robust.

Amid this operating environment, throughout the Group we pursued building of “A strong proit structure and sustainable growth”, the management concept that underlies our third medium-term management plan, which began in April 2005. Par ticular effor t was devoted to strengthening our marketing capabil- ity by broadening the customer base and expanding our service business, and to enhancing cost-competitive- ness by such means as cutting ixed costs, reducing cost of sales and rais- ing productivity.

Dur ing the year, the Company achieved growth in both revenues and proits. We generated net sales totaling to ¥85,769 million, up by 7.6% year-on-year, operating profit of ¥10,144 million, up by 6.4%, and ordinary profit of ¥10,206 million, up by 6.5%. As a result, the Com- pany posted net income of ¥5,961 million, an increase of 0.8% from the previous year.

The following is an over view by business division.

Sales by business division

(Millions of yen)

Year ended March 31, 2007

Year ended

March 31, 2006 _Change

April 1, 2006, to March 31, 2007 April 1, 2005, to March 31, 2006

Amount Ratio (%) Amount Ratio (%) Amount Ratio (%) (Time Information System Business)

Information Systems 14,674 17.1 13,909 17.4 765 5.5

Time Management Equipment 7,296 8.5 7,386 9.3 -90 -1.2

Parking Systems 33,738 39.4 31,033 38.9 2,705 8.7

Subtotal 55,708 65.0 52,328 65.6 3,380 6.5

(Environment System Business)

Environmental Systems 20,171 23.5 17,021 21.4 3,150 18.5

Cleaning Systems 9,890 11.5 10,395 13.0 -505 -4.9

Subtotal 30,061 35.0 27,416 34.4 2,645 9.6

Total 85,769 100.0 79,744 100.0 6,025 7.6

(5)

Time Information Systems Business

Information Systems:

• Time & Attendance (T&A), Payroll systems

• Human-Resource Management systems

• Access control systems

• Cafeteria management systems Time Management Equipment:

• Time recorders

• Time stamps Parking Systems

• Parking systems

• Bicycle-parking systems

• Parking management equipment

• Parking management services

Information Systems

Demand remains robust in the domestic market for this business division, as the enforcement of the Financial Products Transaction Law (Japanese equivalent of SOX in the U.S.) has expedited the building of internal control systems, and there is increasingly well-entrenched com- pliance-consciousness with regard to accurate identiication of working hours and the protection of personal information. Amid this, business reforms directed towards T&A management based on IT control have been spreading to large corporations and core local government bodies, and Amano has been meet- ing this demand trend by enhancing the conpetitiveness and sales structures for large-scale solutions, step- ping up its approaches to the public- sector market, and incorporating IC cards to propose comprehensive solutions for access control systems, and has also devoted efforts to developing new markets.

Sales in the field of T&A systems rose by ¥453 million over the previous year, or 4.5%, while in the ield of access control systems they increased by ¥240 million, or 21.1%. Broken down by product, hardware sales were up by ¥689 million, or 12.3%, year-on-year ; software sales fell by ¥255 million, or 6.0%; and

sales generated by maintenance and supply operations increased by

¥317 million, or 12.1%. Major con- tributing factors to the increase in hardware sales were large-scale orders received from large corporations and the public-sector market. The principal reason for the decline in software sales was a slippage of demand for renewal among small and medium-scale business estab- lishments.

Overseas, sales grew in Europe but declined in Nor th America and Asia, totaling ¥1,076 million, down by 6.6% year-on-year.

As a net result of the above, overall sales in this business division totaled ¥14,674 million, representing an increase of 5.5% from the previous year.

(6)

Time Management Equipment

Sales in this segment within Japan remained sluggish during the year, with demand for time recorders showing no signs of a recovery. Domestic performance in this business division was helped by strong sales of the TimeP@CK time recorder with PC spreadsheet software, boosted by an enhanced product lineup. Never theless, overall unit sales slipped and caused sales revenues to fall, whereas in export sales time recorder s and time stamps both recorded growth in sales. In regard to over seas business performance, revenues declined in Europe and Asia but rose in North America, bolstered by a bulk purchase of time stamps. Overall, overseas sales totaled ¥3,244 million, up by 2.3% year-on-year.

As a result of the above, the Time Management Equipment Division generated sales totaling ¥7,296 million, down by 1.2% from the previous year.

Parking Systems

In the domestic market, the revision of the Road Trafic Act in June 2006 has brought about a rise in the number of small-scale parking lots and an increase in the operating ratios of existing parking lots. As a result, and with the added impetus of robust demand for bicycle parking systems, the market has been expanding at a remarkable pace. Amid this mar ket environment, Amano took steps to meet the increasingly varied nature of demand, including the diversification of settlement methods and the ac- commodation of motorcycles. To this end, we fur ther strengthened our structures in such areas as production, development, and sales, and engaged in the proactive marketing of comprehensive proposals for ensuring eficient and strategic parking- lot management that beits the era of the network.

Broken down by product, sales of system devices increased by ¥1,273 million, or 8.5%, over the previous year, but revenues from maintenance and supply operations declined by ¥163 million, or 2.1%. This fall in maintenance and supply revenues is attributable in part to the fact that maintenance revenues fell in reverse rebound of the ¥900 million of extraordinary replacement demand for bill readers for new bills that occurred in the previous first half, in spite of the fact that sales of

supplies such as parking tickets and service tickets were up because of the increase in the number of parking-lots and in parking-lot operating ratios referred to above. In addition, strong performance was achieved by the parking operation and management business of Group subsid- iar y Amano Management Ser vice Corporation, which posted a 25.1% year-on-year increase in revenues. With regard to overseas operations, favorable sales growth was achieved in North America, Europe, and Asia. In North America, results were impacted positively by the acquisition of ITS (now AUI), while in the Asian region performance in Korea and Malaysia remained good, and performance in Europe was also robust. In consequence, sales overall totaled

¥6,668 million, up by 21.4% year-on- year.

The net result of the above developments was that sales achieved in this division totaled ¥33,738 million, or an increase of 8.7% over the previous year.

FT-4800 Time P@CK

(7)

Environment System Business

Environmental Systems:

• Standard dust collectors

• Large dust collection systems

• Pneumatic powder conveyance systems

• High-temperature hazardous-gas removal systems

• Deodorization systems

• Electrolytic water generators Cleaning Systems:

• Sweepersand Vacuum Cleaners

• Cleaning equipments

• Dry-care cleaning systems

• Cleanliness management services

Environmental Systems

This business division continued to benefit from continued expansion of demand, buoyed by brisk capital investment in domestic manufacturing industry.

In the standard dust collector segment, sales were up by ¥839 million, or 13.1%, year-on-year, led by sales of small dust collectors and oil mist collectors. Sales of large systems rose substantially, up by 25.4% year- on-year, to ¥1,444 million, backed by widespread demand for new installations and for larger capacity

in the manufacturing sector, and by steps taken to comply with laws to enforce environmental conservation. Revenues from maintenance and supply operations rose by ¥639 million, or 18.6%, as growing awareness of safety and performance maintenance led to growth in ser vice- related sales.

Over seas operations performed well, primarily because of orders for large systems received from Japa- nese companies in China and Thai- land. Sales were up by 25.9% year- on-year, to ¥1,071 million.

As a result of the above, the sales of this business division totaled

¥20,171 million, a signiicant increase of 18.5% over the previous year.

Cleaning Systems

In this business division, major con- venience stores in Japan continued to switch to ceramic flooring materials, and this led to a decline in acquisitions of small buffing machines for new stores. In the sphere of large-scale stores, the number of store-openings decreased, and stores continued to diversify their floor surfacing, with the result that sales of large bufing machines also fell. In contrast, sales to industrial plants of scrubbing and cleaning machines grew robustly, bolstered by the introduction of new machines into factories.

Overall, sales of cleaning equipment decreased by ¥254 million, or 7.6%, from the previous year, but revenues from maintenance and supply operations were up by ¥170 million, or 5.8%, as cleaning management business performed strongly.

Overseas, sales in this segment declined in Nor th America and Asia, causing overall sales to decline by 9.2% year-on-year, to ¥2,903 million. As a result of the above, the sales generated in this segment totaled

¥9,890 million, down by 4.9% from the previous year.

SE-500GN EM-8e

(8)

Outlook for Next Fiscal

Year, and Issues to be

Addressed

The outlook for the Japanese economy points to ongoing buoyancy in the corporate sector and mod- est growth in consumer spending, backed by the strength of economies overseas and by the calming of crude-oil prices. We believe that the

sustained economic expansion will continue.

Amid this operating environment, Amano and its Group companies are pledged to fur ther strengthen collaboration, create new markets in each of their business ields, engage in vigorous sales activity in close liaison with customers, supply high- value-added products through the globalization of their development structure, and provide a wide range

of solutions and services. In paral- lel with this, we will endeavor to achieve our goal of building a strong profit str ucture and sustainable growth.

In the coming iscal year, we will im- plement the business strategies set out below in accordance with our third three-year mid-term management plan.

Analysis of Financial Condition

Consolidated cash and cash equivalents declined by ¥3,713 million, or 10.8%, from the previous year, to a total of ¥30,690 million at the year- end. The principal factor behind this was an increase in the amount of funds being invested.

The following is a description of the status of each type of cash low during the year, and the underlying factors.

Cash flow from operating activities Net cash provided by operating activities totaled ¥7,102 million, up

¥1,053 million, or 17.4% over the year before. This was attributable primarily to a decline in income taxes paid.

Cash flow from investing activities Net cash used in investing activities was ¥8,834 million, up ¥4,554 million, or 106.4% over the year before. The principal factors behind this

were an increase in outlows for the purchase of intangible fixed assets and an increase in placements of funds in time deposits.

Cash flow from financing activities Net cash used in inancing activities totaled ¥2,017 million, up ¥117 million, or 5.5% over the year before. This was attributable principally to factors such as a decline in cash outlows for the repayment of long- term borrowings.

Notes: Equity ratio: Equity capital/Total assets

Fair value equity ratio: Gross market capitalization/Total assets

Ratio of cash flow to interest-bearing liabilities (%): Interest-bearing liabilities/Cash flow from operating activities Interest coverage ratio: Cash flow from operating activities/Interest payments

Assumptions

1. All indicators are calculated on the basis of consolidated financial values.

2. Gross market capitalization is calculated by multiplying the closing price of the Company’s shares at the year- end by the number of shares of common stock issued and outstanding at the year-end (less treasury stock). 3. Cash flow from operating activities refers to cash flow from operating activities posted under the consolidated

statements of cash flows. Interest-bearing debt refers to those of the liabilities stated in the consolidated balance sheets on which interest is paid. Interest payments equate with interest paid stated in the consolidated statements of cash flows.

Reference: Trend of cash low indicators

Equity ratio (%) 74.8 75.5 72.5 74.8 74.4

Fair value equity ratio (%) 52.6 76.6 95.0 156.0 103.6

Ratio of cash flow to interest-bearing liabilities (%) 0.4 0.3 0.3 0.4 0.4

Interest coverage ratio 88.4 165.7 255.8 88.1 125.3

(9)

Time Information System Business Information systems business is ex- periencing growth in demand for the creation of systems and introduction of new ones as a result of the revision by companies of their systems for T&A information. This applies not only to private-sector companies but also local govern- ments and public corporations. In addition, in the area of security the enforcement of the Law Concerning the Protection of Personal Informa- tion has generated growing demand for door security to control access to offices in which personal information is handled, and this is helping to invigorate the market.

Given the positive impact on business of this market environment, we aim to expand T&A solutions business targeted at both large companies and the public sector, doing so through the fur ther enhancement and expansion of mar keting and conpetitiveness. We are also com- mitted to expanding business in the field of door security in the same way.

In addition, as a means of enhancing the proitability of this business, we will cut costs by standardizing system software for our solutions business, so as to both maintain and expand earnings capacity.

In par king systems business, the mar ket environment is changing dramatically. Developments have included the diversiication of means of payments, the start of outsourcing to the pr ivate sector of the super vision of parking violations, the introduction of systems into bicycle parks, and the imposition of a mandatory requirement to provide supplementary motorcycle parks. Amid this, market environment, we will be strengthening our approaches to the supply of systems to the market for bicycle parks that have arisen as a result of the problem of illegal parking of bicycles, and also for motorcycle parks. We will also expand business by strengthening our comprehensive proactive market capabilities, targeting the market for the outsourcing of management services, which is continuing to expand.

Overseas, we aim to secure the largest market shares in North America, Europe, and Asia, expanding operations by enhancing our marketing and conpetitiveness.

Environment Systems Business In environmental systems business, heavy demands are being made on companies to fulill their responsibil- ity to society by strengthening the

observance of environment-related laws and regulations in their plants, and by reducing the burden they place on the environment.

Given these circumstances, we aim to expand the scale of operations in this segment by developing new products to help lower the burden on the environment, introducing new products into the market to match the reduction in size and diversification of machine tools, and expanding maintenance business. In collaboration with Group companies, we will also provide total solutions ranging from consulting for research and analysis on asbestos dust and other such harmful substances, to design, installation, and maintenance.

In overseas markets, we will respond to inroad by Japanese automotive and related companies into China and other Asian markets, and will enhance our marketing capacity and engineering structure in the local markets.

As a result of the activities outlined above, for next fiscal year, we are forecasting net sales of ¥91.0 billion, operating proit of ¥10.7 billion, ordinary proit of ¥10.8 billion, and net income of ¥6.3 billion.

(Millions of yen) Net sales Operating profit Ordinary profit Net income

Year ending March 31, 2008 91,000 10,700 10,800 6,300

Year ended March 31, 2007 85,769 10,144 10,206 5,961

Change 6.1% 5.5% 5.8% 5.7%

(10)

Operating and Other Risks

Among the matters relating to the qualitative information contained in these summary inancial statements and relating to the consolidated financial statements, the following are those that could be envisaged as having a possible material impact on investors.

With respect to matters that are considered to be potential risk factors in the undertaking of business by the Amano Group either now or in the future, they are estimated to the greatest extent possible, and the risk factors are then addressed and eliminated in the course of business activities.

Matters relating to the future are those that are adjudged to be so as of the date of the release of these inancial results (May 8, 2007). (1) Impact on earnings of changes

in the operating environment The Amano Group uses its accumu- lation of unique technologies and know-how to provide customers with high-quality products, services and solutions, gaining large market shares in each business segment in Japan, Nor th America, Europe and Asia, and developing business glob- ally.

In the year ended March 31, 2007, in terms of sales, the time information system business accounted for 65.0% of the total, and the environ-

ment system business accounted for 35.0%. With respect to their con- tribution to operating proit, before deduction of unallocated expenses, the time information system business contributed 70.9%, while the environment system business contributed 29.1%. In terms of weighted average sales over the most recent five years, time information system business accounted for 65.0% of total sales and for 75.7% of operating proit.

With respect to future risk factors, in each business activity within the time information system business segment, which accounts for a large proportion of the Group's business, if market expansion is expected for such reasons as a signiicant change in the demand str ucture or the creation of a new market, it can be expected to attract entry by entities in other industries or by other competitors. In that event, if a competi- tor were to enter with innovative products or solutions that surpass Amano’s, the Amano Group’s market advantage would decline, and that may have a material impact on its business performance.

(2) Fluctuations in exchange rates The Group engages in business activities on a global scale and has production and sales bases overseas. In view of this, the Group's business results may be impacted by luctuations in exchange rates when

transaction amounts overseas are translated into yen.

(3) Information security

In order to offer system solutions and under take application ser vice provider business, Amano Group handles confidential information such as personal information con- cer ning customer s or provided by customers. In view of this, the Group has developed a structure for the management of conidential information, implements thorough staff training, and uses software to prevent leaks of information for the purpose of preventing network access to conidential information and of preventing leaks of confidential information through the removal of data and information. To that end, it has also established a committee to manage the protection of personal information, so as to ensure a foolproof structure. Nevertheless, in the event that an unforeseen situa- tion were to arise, and information of the kind described above were to be disclosed externally, resultant factors such as loss of confidence may have a material impact on the Group’s business performance.

(11)

Information Systems

Building A Total Security System with IC Employee ID Cards

Increasing implementation of Amano Information Systems to public and government markets

IC cards are wildly used in many situations. With use of employee IC cards, Amano’s “IC Card Total Se- curity Solutions”provide “Door Se- curity Management Systems”linked to “Time & Attendance Information Systems,”one of the Amano’s core businesses with all security products to meet specific customer needs and build an uncompromised ofice security system. For public and gov-

ernment related markets, “AGX200” ser ies have been developed to serve as a terminal of IC card application. With use of IC employee IDs, Amano encourages public and government institutions throughout the nation to use an electronic attendance system for accurate management of attendance of staff as well as for building a “Door Security System”to protect sensitive information from leakage. This system has already been installed in three pre- fectures, seven major cities, twelve wards of Tokyo and ive urban cities.

Time Management Equipment

PC-connected Time Recorder

“Time P@CK Professional” a higher management level

Since we launched a PC-connected Time Recorder Package (with cal- culation software) designed for small/mid-size businesses, “TimeP@ CK”has been most favorably ac- cepted in the market as an industry standard. TimeP@CK Professional, (called ProP@CK otherwise) an upward version with more comfort of use and a higher level of management was also released with good sales as well. With more enhanced support, aggressive sales campaign is being continued with a free seminar

“TimeP@CK USEum”regularly provided by our trained instructors and at showrooms of our sales offices for demonstration of “TimeP@CK” to introduce to sales channels.

Parking Systems

Introducing User-Friendly Parking Systems

Universal Design Automatic Pay Station (UD Central Pay Station) We implemented an empirical joint research with Tokyo Metropolitan Public Corporation for Road Improvement and Management (head ofice: Shinju- ku-ku, Tokyo; “Public Corporation”). As a result we developed, the “Universal Design-Compatible Automatic Pay Station” (“UD Central Pay Station”) corresponding to the “Guideline for the “Parking Lot Universal Design” issued by the Public Corporation. This

“UD Central Pay Station” was installed in the “Nerima Central Overpass Universal Design Parking Lot” (loca- tion: Takamatsu, Nerima-ku, Tokyo [under Nerima Central Overpass of Loop Road No. 8] with a capacity of 45 cars) managed by the Public Corporation and started the operation from March 14, 2007. Amano has been proposing many parking systems and supplying automatic pay stations equipped with the latest technology, using various IC cards or Dedicated Short Range Communication(DSRC), etc. Many “UD Central Pay Stations” are expected to be adopted as a user- friendly paystation to various users, (especially aged people or disabled person) in public parking lots and private parking lots.

Matsudo Station West Exit Under- ground Parking qualiied as irst Good Parking System

Outstanding Performance of @Park Parking Information Search Service Recently, Matsudo Station West Exit Business Activities

Door security system

Entry management system TimePro-XG

Information terminal of barrier-free design (Braille letters) and IC card employee ID

“Time P@CK Professional” ; Tme recorder(left), designed for Pro P@CK, and software running on PC(right)

(12)

Underground Parking which is operating the parking information system

“@park (At park)” jointly developed by Amano and Mitsubishi Heavy In- dustries Parking, was elected as the first qualified parking of the Good Parking System (Superior Parking Approval System) of Japan Parking Facility Promotion Organization. Matsudo City was adopted as a

“demonstration experiment area for the advanced parking information system” of the Ministry of Land, Infrastructure and Transpor t Road Bureau, in March 2005. Seven parking lots around Matsudo station including Matsudo Station West Exit Underground Parking jointly started the demonstration experiment of the parking information system. In 2007, seven parking lots established

“Matsudo Station Area Par king Information System Management Liaison Council.” The parking lots are managed and operated by the City Area Improvement Office in Urban Development and Improve- ment Division of Matsudo City. To deliver smooth road traffic in the Matsudo Station area by preventing on-street parking or by relieving the traffic congestion caused by cars taking weaving courses searching for a parking space etc., real time information of the seven parking

lots around the station is available for access easily obtained using “@ park information service”, by cellular phone, personal computer or VICS car navigation.

Environmental Systems

Environment stress Reduction Type Dust Collector

In the ield of environmental system, we provide comprehensive solutions in response to market change, such as increasing investment in environment-conscious facility (stress reduction type) for the domestic manufacturing industr y. Two types of dust collector of stress reduction type for the environment systems provided by Amano,are as fellows:

“Cyclone Dust Collector”

“Aero John” (IX/IP/IB series) is an industrial dust collector of energy- saving type with a separate blower, designed for recovering small dust from common powder material to ine powder toner with no leak blow. The collector adopts the cyclone system providing the long-life fil- ter unit, compact body and large- volume discharge tank.

The “mechanism to prevent small dust

from scattering at discharge,” taking into account of worker's health and work environment health first, dis- charges small dust safely and easily.

“Touch-free Powder Collector”

“Touch-free Powder Collector” installed to a hopper type dust collector allows to collect dust safely and easily without touching it.

With a ilter pack designed for it, it allows to replace the ilter without touching it, keeping dust from dis- persing with no mess. The dust col- lected is then packed for discharge, providing an ideal solution for pow- ders of heavy metals, agriculture or toxic chemicals.

Universal Design UD-7800

1,200 1,000

390 足入れ空間

操作パネルの高さ硬貨投入口・返却口紙幣・カード挿入口高さ 800

Matsudo Station West Entrance Basement Car Park

@park Homepage

Aero John

Touch-free Powder Collector

(13)

Cleaning Systems

Compact and light weight design for one-up cleaning efficiency

“Clean Burny, a small burnishing machine S-380 growing in sales Amano has a number of walk-behind loor cleaning machines developed for service and building maintenance markets. In recent years, we have increased product lineup of oil-resistant machines for factory loors, which often become slippery by lubricants or machine greases. The Clean Burny S-380 introduced in Januar y 2007 is designed most compact and light weight ever introduced in the industry. It is designed on the polisher and vacuum cleaning concept that it allow to clean narrow paths or under workbenches where predecessor s would not access and yet must have a func- tion of waste water collection. The waste water tank is then designed as a removable “bucket” to make it easy to move and drain the waste water. Because of its compact and light-weight design, it can be easily moved from one place to another or it can even be transferred by a vehicle. With use of a squeegee on both front and rear, it allows to clean narrow spaces without swivel

and collect waste water. The sales of the new floor cleaning machine S-380 with powerful cleaning and suction have been growing since it was released.

M&A TOPICS

Amano to acquire a company that develops and supplies parking software in the US market.

On May 7, 2007, Amano Corpora- tion, through Amano USA Holdings, Inc ., reached a basic agreement with Mr. Terrence G. McGann and four other shareholders to acquire Terry McGann & Associates, Inc. to acquire that company. The company, based in the state of Minnesota in the Midwest of the United States, engages in the development and sale of software for parking management. It is Amano’s view that by ac- quiring Terry McGann & Associates, Inc., and consequently being able to acquire its software and first- class customer as it is, the synergies generated from merging the two companies’ know-how will enable it to provide state-of-the-art solutions in parking management systems directly to customers, thereby making rapid progress in increasing market share in the United States

Amano acquired sales right from car and bicycle parking from an Omron Group company

In April 2007, Amano closed a purchase agreement to acquire sales r ight of car and bicycle par king products of Omron T.A.S. Co., Ltd. (TAS) a subsidiary company of Om-

ron Field Engineering Co., Ltd. TAS has good installation experience in parking management, primarily for government agencies, at over 200 bicycle parking and over 100 car parking sites.

Amano acquires ITS, a company that supplies parking, information and security systems in the U.S Market.

Amano acquired Industrial Time & Solutions, Inc. (ITS) in Connecti- cut, September 29, 2006 through Amano Cincinnati, Inc. Taking over all ITS’s customer base and with consolidated management of Amano, as manufacturer and ITS, as distributor, it is expected that Amano will provide most advanced solutions of parking and access control directly to the customer base, with more enhanced direct sales to boost its market in the U.S.

S-380

(14)

Amano Electronics Europe, N.V.

Amano Electronics Europe copes with the new tendencies on the Market.

The European Market is changing fast from single solutions towards Integrated Solu- tions and Total Solution Provider.

More and more, companies are looking for one single trustful contractor that provides them with all elements of the T&A and ACCESS solutions. The Local Sales Branch is very active on that market and is beneit- ing from the quality of Amano Products as well as the Amano Services. Some perfect examples are:

PASFROST. A company in the vegetables market started 10 years ago with a PIX3000 and moved step by step towards a Time pack two years ago towards Astrow for his T&A solutions. The laws on Hygiene in the food industry become stricter the way vegetables are handled and their trace- ability. Therefore, Pasfrost invested in a new production facility and asked AMANO to expand the Astrow solution and to provide an access control system that controls all access to the clean area. This was made by installing an AMANO-NET installation with the AIX400 and 32 readers, with 3 turnstiles linked to the access control and the Hand Cleaner. The next step is to in- stall Barrier gates and access readers on the Truck entrance and the weighbridge.

IVLO. A governmental Laboratories that is responsible for Agriculture approvals and tests. There are 11 different buildings with each his own tasks in that global project. In the past they had a mix of individual installation with Time pack/AMX12, ASTROW/ GS and even installations from competitors.

Recently AMANO has been awarded with the Integration Contract for the T&A where all 11 buildings are provided with an IT30 T&A terminal and linked via the network to ASTROW Multi-user with all the related modules such as PIP and ESS. This project is still in progress, and already we received an order for the ACCESS control on the irst building. All sites have to be in operation with access the next 2 years.

Amano Cincinnati, Inc.

AMANO GOES 24/7 FOR TIME & ATTENDANCE Next Generation of Website Launched Amano is proud to unveil the next generation of its website. The economy and technology continue to evolve and so must the appearance and functionality of www. amano.com. Starting June 15, 2007, Ama- no provides an on-line store for customers to purchase time clocks and accessories. The site will include a dealer portal to be launched at a later date.

More and more business is conducted on- line, spanning time zones and geography, which requires 24 hour 7 days a week accessibility. Customers and dealers have come to expect the immediacy and respon- siveness that can only be supported by an e-commerce solution. Amano answers the need through its newly overhauled website built on a pure e-commerce platform for enhanced functionality and ease of use.

Success with Sam’s Club

Amano continues its success with Sam’s Club, one of the largest ware- house clubs with 47 million mem- bers. Amano is in the top ten sellers in their business category and sales there are currently estimated to reach $5,000,000 retail in 2007.

On the Samsclub.com website, Amano’ s sales are up 35 percent. Time Guardian, a small business integrated Time & Atten- dance product, has achieved the position of top selling Time System Clock product, with an increase in sales of over 50%. Amano continues to develop its relationship with Sam’s Club and will be included in one of the Fall catalogs. Sam’s Club and Amano will pursue additional opportunities to improve sales through this important relationship.

Growth through Recent Acquisitions Amano Software Engineering, Inc. merged with its sister company Amano Cincin- nati, Inc. in August of 2006. ASE is the developer and marketer of iParc (Parking Revenue and Control System) Software. Some thirty days later, in September 2006, Amano USA, Inc. (AUI), a newly formed company, acquired the assets of Industrial Time & Systems, Inc. (ITS). This acquisition is an integral part of ACI’s strategy to get closer to its end user customers, enhancing our understanding of market requirements and directly influencing our development of new and innovative products. Now trading as AUI, the former ITS was and is a leader in the installation of the iParc Software. AUI anticipates excellent growth in 2007 (versus 2006) of nearly 16%, with sales of nearly $19 million.

Amano Cincinnati, Inc. also acquired the assets of Impro USA in Dunedin, Fla. As a result of this acquisition ACI is now the ex- clusive dealer of the Impro Building Access and Control products in North America. ACI is working very closely with Impro to

Proximity IC card reader

Full-height turnstiles

(15)

Amano Malaysia

Amano Malaysia (AM), a wholly-owned Subsidiary of Amano Corporation Japan, was established in February 2005. It of- icially commenced business operation on 1st July 2005. Although its main business focus is in the Malaysian market, AM is also actively involved in projects, especially for environmental dust collection systems, in neighbouring countries like Singapore, Thai- land and Vietnam.

AM’s business activities in Malaysia are presently concentrated in Time Informa- tion Systems (TIS), Carparking Projects and after-sales services. For environmental dust collection systems and projects AM is targeting at the export market.

The domestic market in Malaysia for Dust Collectors equipment sales and Projects are handled by Amano Cleantech (M) Sdn. Bhd since its establishment in 1993.

Although AM is only about 2 years old, it has managed to secure quite a few promi- nent carpark projects in Malaysia. Among them are Shopping Complexes like :- 1 Utama, AEON-Jusco, Ikea and others. To date, a total of 7 AEON-Jusco Shopping Centres are using Amano Parking Systems. AM is currently working on a few other new Shopping Complexes and are quite optimistic about its future business growth in these areas.

As part of its original business plans, AM has also just commence its local assembly of Barrier Gates Model TF1630KN at its present premises. The main components develop, market and sell these products

through its dealer channels as well as the branch ofices of ACI throughout the coun- try. Sales of these products are expected to reach approximately $2.5 million per year in mid 2007.

Amano USA Holdings, Inc., the parent company of all the U.S. subsidiaries, expects overall sales of over $95 million versus previous year of $76 million. This increase is due to signiicant organic growth in its Park- ing business as well as the full year results of acquisitions in the Parking, Access and Security businesses.

Amano Korea Corporation

Amano Korea Corporation parking business growing with management services expanding

Amano Korea Corporation is expanding its parking business with revenues growing both in sale of parking systems and Man- agement Services business. Demand for automated parking management systems, in particular, is expanding.

With over ninety percent of all automated parking systems delivered by AMANO in Korea in 2006, Amano Korea Corp. dominates the automated parking market, positioning itself as No. 1 supplier and top player in the Korean industry.

In the Parking Management Services, a number of universities and hospitals are increasingly using our services.

With good experience in the management of over 16,000 car spaces, Amano Korea has established a support center in Seoul to expand its business further in other areas. It is now increasing its sales network in cities, including Dae Jeon, Busan and Inchon.

like PCB and motor drive sections are imported from Japan and/or Korea. The barrier gate casing and other metals parts are fabricated locally. AM is planning to assemble about 300 units of Barrier Gates during the irst year of operation.

For the TIS business in Malaysia, AM is reviewing its current product range, both hardware and software, with an aim to expand its business activities in order to increase its sales volume as well as market share.

Amano Time & Air

Singapore Pte. Ltd.

With awareness of proximity IC cards used for T&A terminals growing in Thailand, more companies are increasingly changing their barcoded cards to proximity IC cards. Delta Electronics is one of the top companies in Thailand, having some 3,000 employees. They had been using an Amano's T&A system with barcoded cards until they decided to change all terminals to AGX- 100FA-L for proximity cards in March 2007. They came to the contract for ifty AGX-100FA-Ls, placing their great trust on good support of Amano's distributor, and more importantly, they felt confidence in the prestigious Amano brand. When employees expose their proximity ID cards to the AGX-100 terminals installed both at IN and OUT gates, the green lamp on the terminal lights, indicating IN or OUT punching is complete.

AEON-Jusco Shopping Centres

Amano Parking Systems

Delta Electronics

AGX-100 terminals In/Out gates

(16)

Yen in millions and U.S.dollars in thousands, except per share amounts - See Note 4 to the Consolidated Financial Statements.

Note: U.S.dollar amounts have been translated at the rate of ¥118 = US $1, the rate prevailing on March 31, 2007. -See Note 4 to the Consolidated Financial Statements.

AMANO Corporation and Subsidiaries

Financial Highlights

For the years ended March 31, 2007 and 2006.

2007 2006 2007

For the years ended March 31:

Net sales ... Net income ... Per share data (Yen & U.S. Dollars):

Net income per share (Basic) ... Cash dividends per common share ... At March 31:

Total assets ... Working capital ... Total net assets ... Sales by product:

Time information systems ... Time management equipment ... Parking systems ... Environmental systems ... Cleaning systems ...

'06 '04 '05

'03 '07

Net Sales Net Income Net Income Per Share

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

0 1,000 2,000 3,000 4,000 5,000 6,000

0 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00

'06 '04 '05

'03 '07 '03 '04 '05 '06 '07

(Millions of Yen) (Millions of Yen) ^(Yen)

¥85,769 5,961

¥74.29 30.00

¥111,487 47,727 83,621

¥14,674 7,296 33,738 20,171 9,890

¥79,744 5,916

¥72.89 26.00

¥105,262 44,782 79,217

¥13,909 7,386 31,033 17,021 10,395

$726,856 50,517

$0.630 0.254

$944,805 404,466 701,924

$124,356 61,831 285,915 170,941 83,813

Millions of Yen dollars (Note 4) Thousands of U.S.

(17)

Consolidated Balance Sheets

As at March 31, 2007 and 2006.

ASSETS 2007 2006 2007

Current assets:

Cash and bank deposits ... Marketable securities ... Notes and accounts receivable:

Trade ... Less allowance for doubtful accounts ...

Inventories... Deferred tax assets ... Other current assets ... Total current assets ...

Investments and advances:

Investment in and advance to affiliates' ... Investments in securities ... Other investments ... Total investments and advances ...

Property, plant and equipment at cost:

Buildings ... Machinery and equipment ...

Less accumulated depreciation ...

Land ... Construction in progress ... Net property, plant and equipment ...

Fixed leasehold deposit ...

Deferred charges and other assets ...

Total ...

¥33,690 500

24,636 (105) 24,531 8,459 1,254 1,336 69,770

524 5,597 6,676 12,797

25,372 19,547 44,919 (29,926) 14,993 5,825 734 21,552

958

6,410

¥111,487

¥34,403 11

20,914 (117) 20,797 7,627 1,262 1,005 65,105

465 6,442 6,642 13,549

24,794 18,405 43,199 (28,620) 14,579 5,770 647 20,996

935

4,677

¥105,262

$285,508 4,237

208,780 (890) 207,890 71,686 10,628 11,322 591,271

4,441 47,432 56,576 108,449

215,016 165,653 380,669 (253,610) 127,059 49,364 6,220 182,643

8,120

54,322

$944,805

The accompanying notes are an integral part of these statements.

(18)

LIABILITIES AND SHAREHOLDERS' EQUITY 2007 2006 2007 Current liabilities:

Short-term bank loans ... Trade notes and accounts payable ... Accrued expenses ... Accrued income taxes ... Other current liabilities ... Total current liabilities ...

Long-term liabilities:

Accrued retirement benefits to employees ... Accrued retirement benefits to directors and corporate auditors ... Deferred tax liabilities ... Other ... Total long-term liabilities ...

Minority interests in consolidated subsidiaries ...

Net assets:

Shareholders’ equity:

Authorized- 185,476,000 shares Issued:

March 31, 2007 - 81, 257, 829 shares ... March 31, 2006 - 81, 257, 829 shares ... Capital surplus ... Retained earnings ... Treasury stock at cost, 971,355 shares in 2007

and 1,167,156 shares in 2006 ...

Valuation and translation adjustments

Net unrealized gains (losses) on other securities Foreign currency translation adjustments ...

Minority interests in consolidated subsidiaries ....

Total net assets ... Total ...

¥434 11,486 4,391 2,271 3,461 22,043

4,270 739 61 753 5,823

636

18,240

–

19,521 45,860

(794) 82,827

514 (356) 158 636

83,621 ¥111,487

¥468 9,637 4,303 2,147 3,769 20,324

4,252 650 71 748 5,721

485

18,240 19,438 42,037

(950) 78,765

798 (831) (33) 485

79,217 ¥105,262

$3,678 97,339 37,212 19,246 29,330 186,805

36,186 6,263 517 6,381 49,347

5,390

154,576 – 165,432 388,645

(6,729) 701,924

4,356 (3,017)

1,339 5,390

708,653 $944,805

(19)

Consolidated Statements of In come

2007 2006 2007

Net sales ... Cost of sales

Gross profit ... Selling, general and administrative expenses

Operating income ... Other income ( expenses ) :

Interest and dividend income ... Interest expense ... Amortization of goodwill ... Gain on sale of plant and land ... Loss on disposal of property and equipment ... Loss on sale of buildings and land ... Gain on sale of investments in securities ... Loss on sale of investments in securities ... Loss on sale of subsidiaries’ stocks ... Relocation expenses ... Other, net ... Income before income taxes ... Income taxes :

Current ... Deferred ... Income before minority interests ... Minority interests in net income of consolidated subsidiaries .

Net income ...

Net income per share, basic ... Cash dividends per common share ...

¥85,769 47,920 37,849 27,705 10,144

218 (61) (320) 62 (46)

–

21 – (24)

–

233 10,227

4,049 54 6,124

(163) ¥5,961

¥74.29 30.00

¥79,744 42,944 36,800 27,262 9,538

136 (60) (320) 332

(67) (21) 55

(1) – (213)

323 9,702

3,845 (196) 6,053

(137)

¥5,916

¥72.89 26.00

$726,856 406,102 320,754 234,788 85,966

1,847 (517) (2,712) 525 (390)

– 178 – (202)

– 1,975 86,670

34,314 458 51,898 (1,381) $50,517

$0.630 0.254

U.S. dollars (Note 4) Yen

(20)

Consolidated Statements of Shareholders’ Equity

For the years ended March 31, 2007.

Millions of yen Shareholders’ equity

Common stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity

Balance at March 3l, 2006 ¥18,240 ¥19,438 ¥42,037 (¥950) ¥78,765

Changes during the year

Dividends from surplus (2,084) (2,084)

Officers' bonuses by appropriation of retained earnings (93) (93)

Increase in retained earnings from merger of consolidated and

nonconsolidated subsidiaries 39 39

Net income 5,961 5,961

Purchase of treasury stock (8) (8)

Disposal of treasury stock 83 l64 247

Net changes in items other than shareholders’ equity

Total changes during the year – 83 3,823 156 4,062

Balance at March 3l, 2007 ¥18,240 ¥l9,521 ¥45,860 (¥794) ¥82,827

Minority interests Total net assets Unrealized

gains(losses) on available-for-sale

securities

Foreign currency translation adjustments

Total valuation and translation adjustments

Balance at March 3l, 2006 ¥798 (¥831) (¥33) ¥485 ¥79,217

Dividends from surplus (2,084)

Officers' bonuses by appropriation of retained earnings (93)

nonconsolidated subsidiaries 39

Net income 5,961

Purchase of treasury stock (8)

Disposal of treasury stock 247

Net changes in items other than shareholders’ equity (284) 475 191 151 342

Total changes during the year (284) 475 191 151 4,404

Balance at March 3l, 2007 ¥514 (¥356) ¥158 ¥636 ¥83,621

Minority interests Total net assets Unrealized

gains(losses) on available-for-sale

securities

Foreign currency translation adjustments

Total valuation and translation adjustments

Balance at March 3l, 2006 $6,763 ($7,042) ($280) $4,110 $671,330

Dividends from surplus (17,661)

Officers' bonuses by appropriation of retained earnings (788)

nonconsolidated subsidiaries 331

Net income 50,517

Purchase of treasury stock (68)

Disposal of treasury stock 2,093

Net changes in items other than shareholders’ equity (2,407) 4,025 1,619 1,280 2,899

Total changes during the year (2,407) 4,025 1,619 1,280 37,323

Balance at March 3l, 2007 $4,356 ($3,017) $1,339 $5,390 $708,653

Thousands of U.S. dollars (Note 4) Shareholders’ equity

Common stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity

Balance at March 3l, 2006 $154,576 $164,729 $356,246 ($8,051) $667,500

Dividends from surplus (17,661) (17,661)

Officers' bonuses by appropriation of retained earnings (788) (788)

nonconsolidated subsidiaries 331 331

Net income 50,517 50,517

Purchase of treasury stock (68) (68)

Disposal of treasury stock 703 1,390 2,093

Net changes in items other than shareholders’ equity

Total changes during the year – 703 32,399 1,322 34,424

Balance at March 3l, 2007 $154,576 $165,432 $388,645 ($6,729) $701,924

(21)

Consolidated Statements of Cash Flows

2007 2006 2007

Cash Flows from Operating Activities:

Income before income taxes ... Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization ... Increase in provision for accrued retirement benefits .... Increase (decrease) in allowance for doubtful accounts . Interest and dividend revenue ... Interest expenses ... Foreign currency translation gain ... Gain on sale of investments in securities ... Loss on sale of investments in securities ... Gain on sale of fixed assets ... Loss on disposal of fixed assets ... Loss on sale of fixed assets ... (Increase) decrease in trade notes and accounts receivable . (Increase) decrease in inventories ... Increase (decrease) in accounts payable ... Others ... Subtotal ... Receipts from interest and dividends ... Interest paid... Income taxes paid ... Net cash provided by operating activities... Cash Flows from Investing Activities:

Payment for purchase of property and equipment ... Proceeds from sale of property and equipment ... Payment for acquisition of intangible assets ... Payment for acquisition of investments in securities . Proceeds from sale of investments in securities ... Proceeds from maturities of investments in securities Increase in time deposits ... Decrease in time deposits ... Loan to third parties ... Acquisition of operation ... Collection of loans ... Others ... Net cash used in investing activities ... Cash Flows from Financing Activities:

Proceeds from short-term bank loans ... Repayment for short-term bank loans ... Proceeds from long-term debt ... Repayment for long-term debt ... Payment for acquisition of treasury stock ... Proceeds from sale of treasury stock ... Dividends paid ... Dividends payment to minority interests... Net cash used in financing activities ... Effect of exchange rate changes on cash and cash equivalents ... Net increase (decrease) in cash and cash equivalents ... Cash and cash equivalents at the beginning of year ... Increase in cash and cash equivalents resulting from merger of consolidated subsidiary and unconsolidated subsidiary ... Increase in cash and cash equivalents of newly consolidated subsidiary ... Cash and cash equivalents at the end of year ...

¥10,227 3,234 17 143 (218) 61 (211) (21) 24 (62) 46 – (3,201)

(594) 1,563 48 11,056 202 (56) (4,100) 7,102

(2,192) 73 (2,755) (258) 42 10 (6,000)

3,000 – (774)

9 11 (8,834)

36 (36) 37 (250) (8) 246 (2,015) (27) (2,017) (25) (3,774) 34,403

61 – ¥30,690

¥9,702 2,816 155 (79) (136) 60 (47) (55) 1 (332) 67 21 (366) (129) (1,852) 954 10,780 130 (68) (4,793) 6,049

(1,719) 617 (1,725) (1,634) 153 32

–

(26) – 22

–

(4,280)

195 (189) 365 (856) (54) 490 (2,072) (13) (2,134) (185) (550) 34,900 – 53 ¥34,403

$86,670 27,407 144 1,212 (1,847) 517 (1,788) (178) 203 (525) 390 – (27,127) (5,035) 13,246 406 93,695 1,712 (475) (34,746) 60,186

(18,576) 618 (23,347) (2,186) 356 85 (50,847) 25,424

– (6,559)

76 92 (74,864)

305 (305) 314 (2,119) (68) 2,085 (17,076) (229) (17,093) (212) (31,983) 291,551 517

– $260,085