April 2012 March 2013 Financial Report | IRライブラリー | 株主・投資家の皆様へ | アマノ

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FINANCIAL REPORT

April 2012 March 2013

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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 its 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.

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: the 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 its customers in relation to the themes of “people and time” and “people and the environment.”

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

2. New Medium-Term Business Plan

Amano and all of its Group companies continue to pursue the Group’s tradition of continuing to evolve in response to the changes of the times, while remaining committed to the following four immutable strategies of the Amano Group.

(i) Emphasis on the Time & Ecology business fields and enhancement of our core business (ii) Being a niche leader in the business fields in which we excel

(iii) Ceaseless restructuring

(iv) Management based on cash flow

In accordance with these four fundamental strategies, Amano launched a new medium-term business plan. An outline of the plan is set out below.

[1] Basic Policies

Under its new medium-term business plan, the Group seeks to become a global niche leader by exploring new market frontiers (advancing aggressively into emerging and untapped markets), having each office engage in multiple business operations, and establishing new business domains. We are pursuing a new global growth strategy designed to maximize our corporate value.

Priority issues under the new plan are listed below.

Management Policy

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1. North American and European markets

North America: In the Parking System business, we will merge Amano McGann’s parking management software with the Amano Group’s software and hardware, introduce new parking systems into the market, and strengthen direct sales structures to enable us to work more closely with customers when proposing solutions. These efforts are designed to build upon our business foundations, which are second to none in North America. In our Time Information System business, Accu-Time Systems Inc. will continue to scale up our operations by launching new products bolstering their already diversified range of time information management terminals, in order to fully utilize their blue-chip customer base. In addition, Amano Pioneer Eclipse Corp. will endeavor to strengthen the Environment System business by enhancing the local production and distribution of oil mist collectors.

Europe: In the Time Information System business, we will continue to enhance Horosmart’s ability to offer holistic solutions, and to expand its blue-chip customer base. These efforts are aimed at cementing our position as number one at the high end of the market in France and at increasing our visibility and expanding further into other markets across Europe. In the Parking System business, we will step up sales of low- priced system products, focusing on the UK and the three Benelux countries, in order to build a stronger business foundation.

2. Asian, Latin American and other emerging markets

Asia: In the Environment System business, we will enhance our ability to offer products and render services to Japanese companies operating outside Japan in other parts of Asia by deepening ties between our Group companies across Asia and our head office in Japan. We will also expand our local production capabilities in order to enhance our cost competitiveness. In the Parking System business, we will seek to further scale up our South Korean and Malaysian operations, as well as to aggressively promote the development of business operations in other Asian countries.

Latin America: In light of the local market’s future growth potential, we will aggressively allocate a higher proportion of our management resources, including local production capabilities, to this region, in order to explore the market frontiers in the Informa- tion System, Parking System, and Environment System businesses.

3.Japanese market

Japan: We will reinforce ties among Group companies and develop high-quality comprehensive service offerings (combining products and services) across all business fields to expand our business domain, create new markets, and enhance our cost competitiveness. These efforts should align our entire group to work cohesively towards maximizing its corporate value.

[2] Numerical Targets

Although the business environment has generally improved as described in the Out- look for the Fiscal Year Ending March 31, 2014 on page 7, uncertainty remains regard- ing trends in capital investment that impact the Environment System business. There- fore, we have reviewed and modified the numerical targets originally set for the fiscal year ending March 31, 2014 as described in Summary Information, taking into account current year results.

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Izumi NAKAJIMA President

Representative Director

3. Basic Policy on Distribution of Profits and Payment of Dividends for

This Fiscal Year and the Next

Amano places great importance on its policy for the payment of 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 of profits and flexible purchasing of treasury stock. The Company aims to maintain a payout ratio of at least 35% on a consolidated basis and a ratio of dividend to net assets of at least 2.5%.

In line with this policy, taking into account our current-year operations results, we plan to pay a year-end dividend of ¥13 per share, unchanged from the amount paid at the end of the previous year. As a result, the annual per-share dividend will be ¥26 (including the

¥13 per share paid as the interim dividend). This corresponds to a dividend payout ratio of 50.0% and a 2.7% ratio of dividends to net assets on a consolidated basis.

With regard to the dividend for the next fiscal year, in line with our Basic Policy on Dis- tribution of Profits and in view of our Outlook for Fiscal Year Ending March 31, 2014, we aim to pay an annual per-share dividend of ¥26 (interim dividend of ¥13, and year-end dividend of ¥13).

Retained earnings will be earmarked 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 rationaliza- tion of production plants and equipment for the purpose of reducing costs and further improving product quality.

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Analysis of Business Results

Business Results in the Year Ended March 31, 2013

During the iscal year ended March 31, 2013, although overseas economies continued to struggle due to uncertainty resulting from the effects of the prolonged European debt crisis, the slowdown in emerging economies (including China), and other factors, the Japanese economy showed signs of improvement in sentiment based on the prospects of the economy because public investments for reconstruction projects, etc. following the Great East Japan

Earthquake bolstered the economy and the yen’s depreciation and surg- ing stock prices continued as a result of expectations stemming from the change in the government.

Amid this business environment, the Amano Group worked, in accordance with the consolidated growth strategy (on a global basis) outlined in its new medium-term business plan, on global market and product development as well as enhancement of its capacity to provide holistic solutions. The Amano Group also concentrated on thoroughly uncovering customer needs, and strove to

reduce sales costs and selling, general and administrative expenses. As a result of the above, during the iscal year under review, the Compa- ny recorded sales of ¥90,295 million, up by 2.4% year-on-year. Operating proit increased by 23.9% to ¥7,329 million, ordinary profit went up by 22.9% to ¥7,768 million, and net income increased by 65.1% to ¥3,986 million, resulting in increases in both income and proit.

The following is a breakdown of sales by business division.

Sales by business division

(Unit: Millions of yen)

FY2011 FY2012

Change year endedMarch 31, 2012 year endedMarch 31, 2013

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

Information Systems 19,569 22.2 19,331 21.4 (238) (1.2)

Time Management Equipment 4,245 4.8 3,996 4.4 (249) (5.9)

Parking Systems 40,794 46.3 42,208 46.7 1,414 3.5

Subtotal 64,608 73.3 65,535 72.5 927 1.4

Environment System Business

Environmental Systems 16,374 18.6 17,386 19.3 1,012 6.2

Clean Systems 7,165 8.1 7,374 8.2 209 2.9

Subtotal 23,539 26.7 24,760 27.5 1,221 5.2

Total 88,147 100.0 90,295 100.0 2,148 2.4

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Time Information System Business

• Information systems:

Time & attendance (T&A), payroll, human-resource management, access control, and cafeteria systems

• Time management equipment: Time recorders and time stamps

• Parking systems:

Parking and bicycle-parking space management systems, and commissioned parking lot management business

Information Systems

Although information-related investments continued to be constrained and market competition is intensifying in Japan, this business division is seeing increasing needs for systems to be used to carry out services as well as an expansion in the cloud computing market resulting from companies’ preparations for their Business Contingency Plans (BCP). In response to these market conditions, the Company concentrated on enhancing its cloud services (e.g., hosting services), proactively developing proposals that offer comprehensive solutions associated with the transition from owning systems to using systems, and uncovering demand by strengthening business support activities carried out by its system engineers.

Domestic sales for the current term were as follows: hardware sales increased by ¥215 million (4.3%) year- on-year, software sales decreased by ¥366 million (11.1%), and sales generated by maintenance contracts and supply services increased by

¥81 million (2.5%). The increase in hardware sales was attributed to the

effects of the launch of new products and orders for large-scale projects, and the decrease in software sales was attributed to a decrease in the number of new projects and a delay in the launch of new packaged software. As a result, T&A system sales were down by ¥156 million (1.9%), while access control system sales increased by ¥144 million (12.4%).

Overall overseas sales decreased by ¥263 million (3.7%). The sales of Accu-Time Systems, Inc. in North America slightly increased and the sales of Horosmart S.A. in Europe declined in terms of Japanese yen due to fluctuations in exchange rates, although sales increased on a local currency basis.

As a result of the above, sales in this business division totaled ¥19,331 million, representing a decrease of 1.2% year-on-year.

Time management equipment

In Japan, this business division continued to struggle under difficult conditions because the demand structure has shifted from standard machines to systems.

In this market environment, the Company concentrated on uncovering new demand by developing and expanding new sales channels (e.g., Internet and mail orders) and strengthening sales promotion activities, in order to enhance and expand its customer base.

Overall domestic sales for the current term decreased by ¥250 million (7.5%) from a year earlier due to weak sales in Japan and sluggish expor ts to Asia. Sales for all of North America, Europe and Asia also dropped. As a result, overall overseas sales decreased by ¥26 million (2.1%).

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

¥3,996 million, representing a decrease of 5.9% year-on-year.

Parking Systems

The Parking Systems business sector in Japan has been working to promote environmentally friendly initiatives and to reduce the costs of parking lot management (e.g., reducing energy consumption), as well as

SX-250

PC-interface Time Recorder

“TimeP@CK” Online seminar

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ensuring safety and security to prevent crimes and accidents in parking lots.

In response to these market conditions, the Company has, in cooperation with its Group companies in Japan, focused its efforts on improving commissioned management services by expanding and improving its support centers to increase convenience for parking lot users as well as providing parking lot owners and parking lot management companies with parking lot information distribution services and video streaming services for crime prevention pur- poses. The Company has also made efforts to expand into new markets for exclusive gate systems, toll road systems and lane control systems. In Japan, sales of parking lot system equipment during the fiscal year under review decreased by ¥696 million (4.3%) year-on-year due to a decrease in the number of orders for large parking lot systems, although medium and small parking lot system projects remained strong. Revenues from maintenance contracts and supply services increased by ¥82 million (0.9%).

The commissioned management business by the Group subsidiary Amano Management Service Cor- poration expanded steadily and the number of commissioned parking spaces increased by 21,500 (9.4%) from the end of the previous iscal year.

Overall overseas sales increased by

¥189 million (1.9%). Sales for North America increased as Amano Mc- Gann, Inc. experienced a recovery. Sales for Europe declined due to the prolonged economic slowdown.

Sales in the Asian region declined as sales in Korea decreased.

As a net result of the above, the Parking Systems business division provided sales totaling ¥42,208 million, an increase of 3.5% year-on- year.

Environment System Business

• Environmental Systems:

Standard dust collectors, large dust collection systems, pneumatic powder conveyance systems, high-temperature hazardous-gas removal systems, deodorization systems, and electrolytic water generators

• Clean Systems:

Cleaning equipment, dry-care cleaning systems, and cleaning management services

Environmental Systems

In this business division, movements to reduce capital investment continued in Japan due to uncertainties over the economy, while demand associated with Japanese-affiliated companies operating abroad remained steady.

In response to these changes in the market environment, the Company proactively shifted its management

resources to where the demand is and focused on scaling-up its operations. The Company’s efforts in- cluded an increase in local staff, the establishment of closer cooperation with overseas Group companies, and full-fledged business development in North America in order to boost sales of products and services to businesses operating overseas. The Company has also made efforts to conquer new markets in the pharmaceutical, food and cosmetics ields.

During the current term, domestic sales of large-scale systems increased by ¥117 million (2.1%), sales of standard dust collectors decreased by ¥20 million (0.4%), and sales of maintenance contracts and supply services increased by ¥248 million (7.0%) year-on-year by means of acquiring overseas demand from companies in Japan.

¥712 million (38.5%) year-on-year because Asian markets continued to remain strong.

As a result of the above, sales in this business division totaled ¥17,386 million, up by 6.2% year-on-year.

Clean Systems

This business division continued to struggle in Japan under difficult conditions caused by the impact of

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Analysis of Financial Condition

(i) Assets, Liabilities, and Net Assets

• Assets

Total assets as of March 31, 2013, amounted to ¥109,476 million, up by

¥5,998 million from the previous iscal year-end. Current assets increased by ¥2,987 million year-on-year. This was chiefly due to a ¥1,166 million increase in notes and accounts re- ceivable—trade and a ¥1,118 million increase in cash and bank deposits. Fixed assets increased by ¥3,010 million year-on-year. This was attributable primarily to a ¥2,176 million increase in investment securities, a ¥591 million increase in intangible ixed assets and a ¥500.7 million increase in lease assets.

• Liabilities

Total liabilities as of March 31, 2013, amounted to ¥32,758 million, up by

¥1,472 million year-on-year. Current liabilities increased by ¥1,468 million year-on-year. This was chiefly due to an increase of ¥859 million in other current liabilities due to an increase in advances received and accrued expenses as well as an increase of

¥298 million in lease obligations. Fixed liabilities increased by ¥4 million year- on-year. The principal factors behind this were an increase of ¥581 million in lease obligations, despite a decrease of ¥313 million in accrued retirement beneits for employees.

• Net Assets

Total net assets as of March 31, 2013 amounted to ¥76,718 million, up by

¥4,526 million from the previous iscal year-end. This was primarily due to an increase of ¥1,995 million in shareholders’ equity resulting from

an increase in retained earnings and an increase of ¥2,450 million in total accumulated other comprehensive income resulting from an increase in foreign currency translation adjust- ments.

(ii) Cash Flows

Consolidated cash and cash equiva- lents increased by ¥665 million from the previous iscal year-end, to a total of ¥26,587 million on March 31, 2013. The status of each type of cash low at the year-end and the underlying factors are as follows.

(1) Cash low from operating activities Net cash provided by operating activities totaled ¥8,660 million. This was attributable primarily to income before income taxes amounting to

¥7,333 million and depreciation and amortization amounting to ¥3,558 million, despite income taxes payments amounting to ¥3,443 million. prolonged corporate restraints on

cleaning management costs.

To cope with this market environment, the Company focused on providing proposals to improve eficiency without compromising quality, which will reduce total cleaning management costs. In addition, the division worked to uncover new demand by proactively holding demonstrations of machines, launching new products, and providing holistic solutions, including peripheral cleaning work.

Domestic sales of cleaning equipment during the fiscal year under review decreased by ¥49 million (2.5%) year-on-year, and revenue from maintenance contracts and supply services increased by ¥48 million (1.6%).

¥235 million (15.4%) year-on-year. Sales for North America started to recover thanks to new product launches and cultivation of markets in Central and South America.

As a result of the above, sales in this business division totaled ¥7,374 million, up by 2.9% year-on-year.

HM-500E

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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

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

* 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).

* The term “cash flow from operating activities” refers to cash flow from operating activities posted under the consolidated statements of cash flows. The term “interest-bearing liabilities” refers to those liabilities stated in the consolidated balance sheets on which interest is paid. Interest payments equate with the interest paid recorded in the consolidated statements of cash flows.

Reference: Trend of cash low indicators

As of Mar. 31, 2009 As of Mar. 31, 2010 As of Mar. 31, 2011 As of Mar. 31, 2012 As of Mar. 31, 2013

Equity ratio (%) 72.9 73.4 70.3 69.6 69.8

Fair value equity ratio (%) 58.8 64.7 59.3 56.9 62.3

Ratio of cash flow to interest-bearing liabilities (%) 24.1 17.1 31.4 50.2 34.7

Interest coverage ratio 200.7 250.6 275.2 158.1 207.7

Outlook for Fiscal Year

Ending March 31, 2014

During the iscal year ending March 31, 2014, we forecast that the Japanese economy will continue to recover at a modest pace, as ex- ports are expected to increase due to growth in overseas economies, including those of the United States and Southeast Asia, and the yen’s depreciation and domestic demand are expected to remain strong on the basis of the trends of increased (2) Cash low from investing activities Net cash used in investing activities totaled −¥5,093 million. This was largely due to expenditures of ¥5,763 million for the placement of time deposits,

¥2,000 million for the acquisition of securities, ¥1,803 million for the acquisition of investment securities, ¥1,792

public investment and improved business and consumer sentiment. Amid this business environment, Amano Corporation and its Group companies continue to emphasize the following strategies: 1) emphasis on Time & Ecology business fields, and enhancement of core business; 2) becoming a niche leader in the business ields in which we excel; 3) ceaseless restructuring; and 4) management based on cash low. In line with these four fundamental strategies, we will pursue our consolidated growth strategy on a global scale to

ensure sustainable growth and the continual improvement of profit- ability with a view to maximizing the corporate value of Amano Corpo- ration.

The following business results are projected for the iscal year ending March 31, 2014: net sales of ¥98,000 million, operating profit of ¥8,200 million, ordinary profit of ¥8,500 million, and net income of ¥4,900 million. These projections assume currency exchange rates of ¥95 to the US dollar and ¥120 to the euro. million for the acquisition of intangible

fixed assets, and ¥1,118 million for the acquisition of tangible fixed assets. These outlows more than offset proceeds of ¥5,265 million from the withdrawal of time deposits and

¥2,000 million from the redemption of securities.

(3) Cash low from inancing activities Net cash used in financing activities totaled −¥3,383 million. This was chiely due to expenditures of ¥1,991 million for the payment of cash dividends and ¥1,173 million for the re- payment of inance lease obligations.

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Operating and Other Risk Factors

Matters relating to the qualitative information contained in these summary financial statements and relating to the consolidated inancial statements that could be envisaged as having a possible material impact on investors are described below. Every effort are made to identify factors that may now or in the future pose a risk to the undertaking of business by the Amano Group, and these risk factors are then elimi- nated or otherwise managed in the course of business.

Forward-looking statements are current as of the date of the release of these inancial results (May 8, 2013). (i) Impact on earnings due to

changes in the business environment

The Amano Group uses the unique technologies and know-how it has accumulated to provide customers with high-quality products, services and solutions, thereby gaining large market shares in each sphere of business in Japan, North America, Europe, and Asia, and developing its business globally.

In the year ended March 31, 2013, the Time Information System business accounted for 72.5% of total sales, and the Environment System business accounted for 27.5%. Be- fore the deduction of unallocated expenses, the Time Information Sys-

tem business contributed 77.4% to operating proit, while the Environ- ment System business contributed 22.6%. In terms of weighted average sales over the last five years, the Time Information System business accounted for 73.0% of total sales and 75.8% of operating proit. One future risk factor is that if market expansion is forecast for a business activity within the Time In- formation System business segment (which accounts for a large proportion of the Group’s business) for such reasons as a signiicant change in the demand structure or the creation of a new market, entities in other industries or other powerful competitors may be tempted to enter the market. In such an event, if a competitor were to enter with innovative products or solutions that surpass Amano’s, the Amano Group’s market advantage would decline, which may have a material impact on its business performance. (ii) 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 luctua- tions in exchange rates when the proceeds for overseas transactions are converted into yen.

(iii) Information security

In the course of providing system solutions and developing cloud business services (e.g., ASP, SaaS, and hosting services), the Amano Group handles confidential information, such as personal information con- cerning, or provided by, customers. In view of this, the Company has strengthened and thoroughly implemented security control measures based on the Information Security Management Rules. Specifically, the Company has implemented measures to protect confidential information (e.g., encrypting hard disk drives and external media as well as periodic staff training through e- learning) to ensure that a foolproof structure is in place. Nevertheless, the occurrence of an unforeseen situation that results in access to or leakage of confidential information as described above could have an adverse material impact on the Group’s business performance due to factors such as loss of conidence.

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Issues to Be Addressed

The Company will take the following steps to achieve the goals set out in its new medium-term business plan.

1) Time information systems

•Information systems business Given the continuing efforts by the labor authorities to more strictly monitor un- paid overtime and long working hours (overworking) in order to eradicate these practices and an increasing number of industrial court cases, there is strong potential demand among companies for T&A systems, which aim to establish and build labor time management systems to optimize business operations by reducing working hours, etc. and to implement measures for compliance toward appropriately managing working hours. However, market conditions remain tough, reflecting prolonged reductions in information-related investments, intensifying competition in the market, and other factors. Meanwhile, the business environment in which this segment operates has seen a significant shift from companies owning systems to simply utilizing them, with an increasingly prominent movement in the industry toward cloud computing.

In this market environment, we will focus on spurring latent demand in our solutions business, which is targeted at medium and large companies, by strengthening our competitive advantage with enhanced software functions and through cooperation with the human resource and payroll systems of CREO CO., LTD., as well as reinforcing our marketing structures with collaboration between sales staff and systems engineers. In addition, we will actively make proposals for comprehensive solutions, including hardware, software, and cloud services, by strengthening alliances with Group companies in Japan in order to respond to the changes of the times. To enhance the proitability of this business, we will strictly manage revenue from our solutions business targeted at large companies, enhance our project management systems, cut costs by standardizing system software, and expand sales of standard software pack-

ages to small and medium-scale business establishments, so as to boost earnings capacity.

Overseas, Accu-Time Systems Inc. will continue to scale up our operations by launching new products to bolster their already diversiied range of time information management terminals, in order to fully utilize their blue-chip customer base. In addition, we will work on establishing a global supply system and reducing development costs by expanding our hardware lineup. As a means of expanding our business, we will also ex- tend our sales channels for software products from Horosmart, S.A. (France) across Europe and reinforce our organizational structures toward globalization.

•Parking systems business

The Parking Systems business sector has been working to promote environmentally friendly initiatives and to reduce the costs of parking lot management (e.g., reducing energy consumption), as well as ensuring safety and security to prevent crimes and accidents in parking lots. Thus, the environment sur- rounding the Parking Systems business has been changing.

In this environment, the Company will, in cooperation with its Group companies in Japan, focus its efforts on improving commissioned parking lot management services by expanding and improving its support centers to increase convenience for parking lot users and provide parking lot owners and parking lot management companies with parking lot information distribution services and video streaming services for crime prevention pur- poses. The Company will also make efforts to expand into new markets for exclusive gate systems, toll road systems and lane control systems.

Overseas, we aim to expand our business and establish ourselves as the top manu- facturer of parking systems in the North American market, leveraging the strengths of Amano McGann, Inc. to further boost sales by building closer relationships with customers. In Europe, we will step up our sales of low-priced system products, focusing on the UK and the three Benelux countries, in order to build stronger operational foundations. In Asia, we will further expand our parking lot management business, focusing on Korea.

2) Environment systems business

•Environment systems

In the Environment System business, the increasing trend in capital investment by Japanese-affiliated companies in the Asian and North American regions continues, and it has become apparent in the business environment that demand has shifted from Japan to the rest of the world.

In this market environment, we will continue to shift our management resources to markets where demand is growing in order to appropriately exploit expansions in demand in the Asian and North American markets. Our efforts include the bolstering of systems to sell products and services to businesses operating overseas, the establishment of closer cooperation with overseas Group companies, and the expansion of production in China. In addition, we will strengthen our capability to develop new products with less environmental impact, launch new products to match the reduction in size and the diver- siication of machine tools, and enhance our lineup of dust-explosion-proof technologies to raise safety standards. We also aim to spur latent demand by expanding our maintenance business and to further strengthen proit control for each site in order to boost proitability.

3) Human resource development Recognizing that people are the key management resource in the operation of our business, we have positioned human resource development as a priority issue and will focus on developing employees who have no fear of change and are willing to meet challenges.

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Time Information Systems Enhancing Competitiveness in the Market for Medium to Large-scale Companies! Business Alliance with CREO Co. Ltd. March 2013, Amano acquired approxi- mately 30% of CREO Co. Ltd., (CREO hereunder) and thereby CREO has now become an equity-method afiliate. This equity participation is aimed to enhance our solution offerings by linking CREO’s HR / Payroll and Financial Accounting systems with Amano’s T&A systems and through product cross-selling we will endeavor to expand our share in the market for medium to large companies where CREO already has its strengths.

In addition, we have commenced hosting services for our “TimeAsset” system, which is a T&A package system already used by many large-scale companies. With this and the “CYBER XEED”, which is already offered, Amano has a full line-up of cloud services for the small / medium companies up to the medium / large-scale companies. We will continue to offer holistic solutions for the “using-instead-of-owning” market.

Parking Systems

Expanding the Business Domain! Consigned Management Services, Ex- clusive Gates

The business domain for Parking Systems is expanding. In order to improve user convenience of our consigned management services, with the cooperation of Amano Management Services Corp., we are enhancing our “Customer Support Center” which offers their services 24 / 7 to cope with troubles such as loss of tickets. For parking lot owners and operating companies, we deliver information via the Internet such as parking utilization and video streaming for security. We also offer LED lighting and solar power generation for energy eficiency. These services are all based on our

keywords Safety, Security, and Ecology. In the exclusive gate market, orders for security gates are increasing. These gates are used in factories and logistic centers to control vehicle movement by restricting entry or logging the entries and exits of vehicles. In addition, Amano has developed an Au- tomatic Toll Collector aimed to improve the eficiency of toll collection at toll roads. On-site operation has already begun. We will continue to expand this business domain to improve the infrastructure of our motorized society.

Environmental Systems

Expanding Sales of Standard Dust Collectors! Launched 4 New Products

In order to expand the sales of standard dust collectors, we have launched 4 new products, the stainless steel “SP” series for food and pharmaceutical factories, the mobile fume collector “FD-10”, the energy

& space saving pulsejet dust collector “PiF” series, and a self-cleaning electric mist collector the “EM-SCII Lt”. We will continue to offer high quality, safe & secure products, which are efficient and environmentally friendly.

In addition, we held a New Product Show in 6 regions across the nation (Sendai, Tokyo, Nagoya, Osaka, Hiroshima, Nagasaki) where we introduced and demonstrated 9 new products, consisting of dust collectors and cleaning equipment. Many customers and distributors came to the venue where they were able to have a irst hand experience in using the new products.

Clean Systems

Launching a New Product for Carpeted Floors! Increased Orders from Ofices and Hospitals November 2012, we launched a new carpet cleaner the “Trailstar” which uses high-speed rotation technology deriving from conventional polishers.

The “Trailstar” utilizes micro vibration, which occurs during rotational movement (Oscilla- tion). The oscillation rubs and beats the carpet lifting the soil achieving powerful cleaning. It is easy to use and now anybody can enjoy cleanliness of a professional standard. Furthermore, March 2013, we launched the low-noise cordless vacuum cleaner the “JV-2e”. As a battery powered cleaner, the “JV-2e” is among the highest performers. The powerful suction can remove ine dust and paper clips deeply embedded in the carpet and without the power cord, it is agile and easy to use in tight spaces. It is widely used in ofices, hospitals, health facilities for the elderly, hotels, commercial facilities to name a few. Business Activities

Collaboration

Amano T&A System

CREO HR/PR System Financial Accouting System

※ZeeM is a registered Trademark of CREO

NEW On Premises Cloud

Automatic Toll Collector built into the tollbooth of a highway

The “Customer Support Center” which provides kind and courteous services.

9 New Products in Full Array New Product Show Dust Collectors & Cleaners

Energy & Space saving Pulsejet dust collector the “PiF” series

New dust collectors and cleaning equipment all brought together in one show

Carpet Cleaner

“Trailstar” AAP-140

Commercial Cordless Vacuum Cleaner “JV-2e”

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Amano USA Holdings, Inc.

AMANO CINCINNATI, INC.

The ACI time division was pleased to release a new ingerprint terminal at the end of 2012. This new terminal (FPT-80) deliv- ers added features like a full color display, view hours at the clock, department trans- fer at the clock, view previous punches to name a few. This unit is combined with our Time Guardian software to create a perfect time and attendance solution for small to medium sized business.

The implementation of the business to business dealer portal has proven to be very effective in reducing the amount of administration required in handling dealer orders. This dealer self service tool allows order entry directly into our system. Each dealer has a secure log in and in addition to placing orders dealers can get marketing information, download manuals, print product brochures, look up part numbers, product pricing, etc.

The TS-3000i automatic time sync web clock is the benchmark in the industry and was designed mainly for the inancial market and the OATS compliance rule that was imposed by FINRA. We have many major financial institutions already using this product to meet the compliance re- quirement. Our success with this product has expanded to other markets like health care, transportation industry and others that require exact time synchronization and stamping. Reporting is one of the main features of this product. A time synch utility software comes with this product but when deploying many units in one location we offer our ATVS software to manage central- ized reporting. This

software allows a user to get email or text alerts when a single unit goes off line. This is critical in keeping a system compliant.

ACCU-TIME SYSTEMS, INC.

Worldwide sales for ATS grew in 2012 as we strengthened our global growth strategy and expanded our international channel re- lationship network. Additionally, we began reinforcing our global support capabilities with a new service provider partnership program (SPPP). The program will improve our ability to offer enhanced maintenance programs and installation services throughout the world. The SPPP is part of our plan to enhance our professional services offerings. The SPPP will be an integral program, now and into the future, as we evolve our business into a stronger recurring revenue model.

As part of that recurring revenue evolution, we also introduced a terminal rental program within North America. The initial success of the rental program encourages us to

this very well-received program with our global partners. Its success is closely tied to the global trend toward Software-as-a- Service (SaaS) and hosted services. ATS also introduced new service programs and integration software in 2012. These new products offer our reseller partners unparal- leled opportunities for new business. As our reseller partners succeed, so does ATS. As part of our core business ATS continued deploying terminals with its partners in high profile installations around the globe. We have a strong presence and channel within North America and our base of international partners is growing. Our products, as a result of our growing channel, are now being used by a large global facilities management company, a school system in Dubai, large enterprise resource planning application providers, and international ho- tel chains.

Planned resources in 2012 were spent on developing a new series of next-generation workforce management terminals called the Universal Series. Introduced in 2012, the Universal Series terminals allow our partners to offer more graphic-intensive functions to improve the user experience. With powerful processors, large color touch screens, and multiple operating systems this new series allows our workforce management software partners to develop new applications. The series also allows them to offer touch-enabled software with modern user interfaces.

ATS also began development of new stand- alone and integrated biometric technologies that will be introduced in 2013. In response to changing market needs ATS expanded its software development and integration capabilities in 2012. As part of that expansion we began offering new terminal management software that allows cloud-based time & attendance and workforce management applications to easily connect to our terminals. As the year ended we were in the midst of several new software/hardware solution deployments for enterprise-level customers. We expect those opportunities to grow around the world for us in 2013. These products are now ready for deploy- m e n t a n d

will begin to impact revenues in Q3 2 0 1 3 a n d beyond.

Amano McGann, Inc. General

The U.S. economy was on unstable ground for most of the reporting year due to several events including healthcare reform, the Presidential election, the Eurozone debt crises, unusual environmental disturbance, and our own Fiscal Cliff. Through all of this AMI was able to improve both top and bottom lines through improved eficiencies and strong results from our direct branch ofices, distribution partners, and our spe-

software upgrades were also a major contributor to this years results.

Amano McGann has continued to show strong leadership in the parking industry during these times by maintaining a strong customer base, pushing the envelope to win new business, incorporating solid strategic alliances, and continuing new product development.

Amano McGann Expands Knowledge and Celebrates the Past while Looking to a Successful Future

Amano McGann held its 80-30-5 Sales Summit and Celebration this past fall in Scottsdale, AZ. AMI personnel and distribution partners joined forces to get up to speed on the corporate vision, improved sales techniques, and the latest products including a irst glimpse of the OPUS product line and new strategic partnerships. Guests kicked off their stay with a welcome reception allowing for mingling and net- working with fellow industry professionals across the United States, Canada, Japan and South Africa. The second night’s events in- cluded an award ceremony focused on sales awards and performance in 2011, giving well deserved recognition to top perform- ing branch ofices and distribution partners. The anniversary banquet was a solid closing to a valuable three day event. The evening was dedicated to relecting on the milestones that have led Amano McGann to where it stands today and a future that continues to shape the parking industry. Amano McGann was privileged to have Mr. Kaoru Haruta, Mr. Izumi Nakajima, Mr. Ter- ry McGann as well as other VIPs, speak in honor of 80 years in

business for Amano, 30 successful years for McGann and 5 years in business as an industry leader for Amano McGann.

Product Development – OPUSolutions™ Amano McGann’s Engineering department and Software Development team have been working diligently on a new well- orchestrated, comprehensive line of products that address the unique needs of the owner, operator and the parking patron. The new OPUS line works to seamlessly connect current assets with future innovation all tied together through OPUSuite™ cloud based software.

OPUSolutions includes:

• Universal Pay Station with optional in-wall mount

• Entry Terminal

• Exit Terminal

• Credit Card Only ExpressParc

• Point of Sale Fee Computer

• Universal Reader

• OPUSuite SaaS Software

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integrate real-time data from Amano with Streetline garage and consumer applications, providing both operators and consumers rich new data to enhance revenue management and consumer services.

For customers managing on-street parking the joint solution will leverage Streetline sensor network technology and applications with Amano’s on-street parking management capability and electronic signage. Success Story

Amano McGann Wins Kansas City International Airport Contract

Amano McGann has gained great success in the airport market supporting over 60 installations across North America through an extensive sales, service and support network comprised of branch ofices, dedicated distribution partners, and U.S.-based software development and manufacturing facilities. A great example of this success is the recent contract award to install an ad- vanced parking access and revenue control system at Kansas City International Airport. This contract includes Amano McGann’s AMG equipment, iParcProfessional web- based facility management software and an integrated Frequent Parker Loyalty program. The solution is part of a massive modern- ization effort that will improve customer service, increase throughput and reduce administrative costs through automation. This combination of hardware, software and automated loyalty program will supercharge a i r p o r t e f f i -

ciency, enhance proitability and ensure airport travelers get in, get parked and exit the facility more quickly.

AMANO PIONEER ECLIPSE CORPORATION 2012 was a successful year for Amano Pioneer Eclipse (APEC), with global sales growth of 17%. This positive sales trend started mid-year 2010 and is the result of on-going business improvements being made by our sales, operations, and product development teams. While this three year plan is not yet complete, it has shown positive results in the APEC business, beginning with the improvement of the US sales team. In 2012, several US sales territories were upgraded by hiring new sales professionals who have industry experience and successful track records in their respective geographies. The restructured US territories produced 46% sales growth in 2012. Operational improvements within the APEC business are ongoing with signiicant improvements achieved in the customer service and shipping/receiving departments in 2012. Overall efficiencies are up in all departments, resulting in a 55% increase in sales per employee and a decreased SG&A spending rate by more than 10% (as a per- cent of sales).

APEC is also committed to driving sales growth through new product development and has established a business goal to have Every hardware device encompasses a con-

sistent method of credential handling, voice announcement, TCP/IP communication and modern design for a uniied look and feel. OPUSolutions will be unveiled to the industry at the 2013 International Parking Institute Conference and Expo and will be available for implementation early next year. IPI 2012 Best in Show

Amano McGann claimed another

“Be s t i n S h ow ” award at the 2012 International Park- ing Institute Con- ference and Expo, the largest industry trade show in the country. AMI developed a market focused branding strategy in 2012, beginning with the launch of the new website, then span- ning into advertising and ultimately laying the design and focus for the 2012 IPI trade show booth. Eight pods were displayed focusing on products and services speciic to each of the following markets: airport, education, event, healthcare, hospitality, mu- nicipal, ofice and retail all supported by the iParcProfessional Software Suite displayed on the center structure.

Strategic Alliances

Bridging the Gap Between On & Off- Street Parking

AMI has partnered with Metric, the United Kingdom’s leading on-street, multi-space parking meter provider, delivering a combined solution for both on and off-street. This integrated solution provides operators with rate management, consoli-

dated reporting and statistical data for superior audit control and management while allowing patrons the convenience of paying by phone, city card, cash, credit or debit card.

The alliance between Amano and Metric will enhance revenue collection and streamline audit trails, giving operators a more comprehensive view of their businesses without manual cal- culation.

Smart Parking for Smart Cities

Amano McGann has collaborated with Streetline to deliver next generation parking automation solutions for parking operators, municipalities and universi- ties. Under the agreement, Amano and Streetline will jointly sell a fully integrated package combining market-leading automation and signage equipment with award-winning sens- ing technology and smart parking applications. The joint Amano/Streetline solution for off-street garage and lot operators will

one-third of its annual turnover produced by sales of products introduced within the last 36 months. In 2012, APEC reached a product vitality score of 35%, thereby exceeding its goal. 2012 saw the launch of several important products in the core APEC business of loor care chemicals and equipment. The launch of the 300BU battery burnisher places APEC at the forefront of battery burnisher development with the introduction of Steady One™ technology, a design that improves the burnish performance of the machine while also extending battery run time. Product development in 2012 also focused on several new chemical products, including a new high performance floor finish (Equinox HG™), fast acting floor stripper (Flash 55™), and a deep scrub loor cleaner (ReBoot™). There are exciting new product launches planned for the future, including the 300BU30X and its patent pending X2™ technology.

2012 also saw the continued development of APEC’s dust and mist collection business. Originally founded as Amano Environmental US (AEUS) in 2011, this business underwent a name change in 2012 to better relect its geographic reach. Now known as Amano Environmental America’s (AEA), this business has expanded beyond its original product offering of small dust and mist collectors for US based lathe and CNC manufacturers to now include large dust collection and material handling systems custom designed for industrial factories across North and Latin America. AEA sales grew 345% in 2012 and are expected to exceed 400% in 2013. This business is growing quickly and is well on its way to becoming an important contributor to APEC’s future success.

Amano Europe Holdings, N.V.

Amano Europe, N.V.

This iscal year, Amano Europe continued to optimize the organization in order to serve better in its core mission to build an indirect sales organization for parking and time solutions in Europe, Middle East and Africa, the primary markets of Amano Europe. For parking solutions also Malaysia, Hong Kong and Australia were served. Astrow WEB, the pan-European time and attendance solution for small and medium sized companies, has been introduced as a next version in the Astrow series. This full web solution offers the technology base for cloud based services, a direction Amano Europe will pursue and continue to invest in the next years. Close cooperation with resellers, understanding their market needs, pro-active product management, excellent support and 20 years of accumulated expe- riences are the key the success.

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X-Parc , the parking solution of Amano Europe, based on barcode technology and an open software platform, is now installed in more than 20 countries. Amano Europe entered into new distribution agreements with resellers in France and the UK. It is the result of the policy to expand its distrib- uter’s network rapidly.

The ongoing shift from a product centric to service centric business model is the second core mission from Amano Europe and it is reflected optimiza- tion of the organizational structure, the competences and the products and services.. Horoquartz:

In 2012, despite a more dificult economic environment in Europe and France, Horo- quartz observed a growth of its business. Access control and Security Solutions have experienced a significant increase in turnover, surpassing the market growth. For instance, some major contracts have been closed with ministries such as Defence De- partment and Police Department. For these contracts Horoquartz has demonstrated its ability to manage high security smart cards including a speciic encoding applied for all government applications. The time and attendance solutions market is now mature in France. Sales of Horoquartz workforce management solutions in SaaS mode are steadily increasing. In order to continue its growth in this market and confirm its leadership, Horoquartz concluded two key partnerships with a leading supplier of MES solutions (Manufacturing Executing System) and with a software company which special- izes in the ield of Human Capital Manage- ment solutions. For better eficiency, Horo- quartz reorganized its R&D Department through a vertical organization, structured by the offered solution. This approach is ac- celerating the development and release of new solutions. Four major innovations were launched at the end of 2012: a new version of eTemptation with an entirely renewed full web user interface, a solution for mobil- ity enabling employees and managers to use the application on smartphones and tablets, a data warehouse solution to store all T&A information on the long run, a new graphi- cal supervision module for

access control. Horoquartz also continued the development of its ecosystem and renewed its partnership with Oracle and Microsoft, obtain- ing a gold certified partner status with these two companies.

Amano Parking Europe:

In this fiscal year, Amano Parking Europe, the R&D center of X-Parc, has shifted its operation from development towards services. Apart from development, Amano parking Europe now also operates as the X- Parc competence center as such taking care of the industrialization and the third line support.

Scopus Omnibadges

With Sogedex Identiication Solution acquisition in 2011, allowing Scopus Omnibadges to become a major actor in this ield in France, the company has gained a few thousand of new customers, many of them been quite in- terested in the company core business : cards printing and personalization.

Therefore, Scopus Omnibadges have invested in a sophisticated new offset press that was up and running in September 2012. Produc- tion output is multiplied by 5 and production cost divided by three, which is a tremendous change for this part of the business, already the most proitable of the company.

With this new piece of equipment, printed quantities have been almost doubled in the last quarter compared to the previous year, some of them being cards that would have been subcontracted before.

At the same time printing q u a l i t y h a s b e e n t r e - m e n d o u s l y improved. AMANO TIME & PARKING SPAIN, S.A. For the purpose of always satisfying 300 customers we have in our territory and keeping high reputation in the market, it is needless to say that one of the key things is the service quality provided by our technicians.

In Amano Time & Parking Spain, one technical manager and four technicians are working and their service ability and quality are highly appreciated by our customers. We have three service bases, which are lo- cated in Barcelona, Madrid and Malaga, and they take care of 300 customers in Spain, Portugal and Andorra with some subcon- tractors. (Please, see the map of the Iberian Peninsula.)

Recognizing the importance of the service quality, in the year of 2012 we reinforced technicians’ service quality by various training and meetings. The regular meeting, at which all our technicians from three bases assist, was organized twice, and the telephone meeting among three bases has been held every Monday. Thus, all our technicians, by sharing customer requirements and exchange opinions, not only improve their quality but

a l s o h a v e t h e same idea, strategy and market information. We will continue

Amano Korea Corporation

The FLAP SYSTEM meets the street and goes lapless! Introducing the new

“FLAPLESS LPR (License Plate Recog- nition) SYSTEM”

As cars continue to increase year by year, securing a parking place in the city center is becoming a major problem. The Govern- ment is taking initiative to not only build new off-street parking facilities, but also working to expand and to build new on- street parking, and to develop parking facilities using a portion of residential areas. In view of this situation, Amano Korea Corp., (AKC) has developed a new on-street parking system, which has high potential. The “FLAPLESS LPR SYSTEM” breaks the norms of conventional on-street parking and addresses the issues, which could not be solved before. We are anticipating great potential for this system.

1. The LPR system incorporates wide- angle cameras with built-in security functions enabling the collection of parking fees!

Flaps of the conventional lap systems were released once the user settles their fees at the unmanned pay stations. With the use of LPR technology, laps were no longer need- ed and the systems evolved to an on-street system. And now the system has evolved even further. The built-in wide-angle camera not only recognizes number plates but it also records a video of the parking space. There is no need to install a separate CCTV for security.

2. In order to enable constant LPR, we have developed a special 2-way LED lighting! -Energy saving and no discom-

Unified Management Center

System Unified Network Configuration

LPR

Management^CCTVManagement^ParkingManagement

Communications Network

Local Management Server

Local 1 Local 1 Parking lot

Local 2 Local 2 Parking lot

Local n Local n Parking lot (parking information provide at local goverment home page)

ITS link PDA link Internet link

Call button Speaker

NO.1 LPR (Camera + LED)

NO.2 LPR (Camera + LED) Select button E-Card Reader

FLAPLESS LPR DESIGN

170

1200 1060