Summary Financial Statements (Consolidated) for Year Ended March 31, 2009

Transcription

1 Member of the Financial Accounting Standards Foundation Summary Financial Statements (Consolidated) for Year Ended March 31, 2009 May 8, 2009 Company name: Amano Corporation Listed on: TSE, OSE Securities code: 6436 URL: Representative: Kaoru Haruta, President and CEO Inquiries: Toshio Kusanagi, Executive Director & General Manager, Administration Division Phone: +81 (45) Scheduled date of ordinary general meeting of shareholders: June 26, 2009 Scheduled date of start of dividend payments: June 29, 2009 Scheduled date of filing of securities reports: June 26, 2009 (Amounts less than 1 million yen are rounded down) 1. Summary of business results for the year ended March 31, 2009 (April 1, 2008 to March 31, 2009) (1) Operating results (Percentages represent changes from the previous term) Net sales Operating profit Ordinary profit Net income Millions of yen (% change) Millions of yen (% change) Millions of yen (% change) Millions of yen (% change) Year ended March 31, 2009 Year ended March 31, ,812 93,351 (1.6) 8.8 5,371 10,011 (46.3) (1.3) 5,293 10,534 (49.8) 3.2 2,214 6,104 (63.7) 2.4 Net income per share Diluted net income per share Ratio of net income to equity capital Ratio of ordinary profit to total assets Ratio of operating profit to net sales Year ended March 31, 2009 Year ended March 31, 2008 Reference: (2) Financial position Year ended March 31, 2009 Year ended March 31, 2008 Reference: (3) Cash flows Year ended March 31, 2009 Year ended March 31, 2008 Yen Yen % % % Total assets Net assets Equity ratio Net assets per share Millions of yen Millions of yen % Yen 116,950 Millions of yen Millions of yen Millions of yen Millions of yen 6,232 9, ,394 86,307 (2,453) Equity in earnings of affiliates Year ended March 31, 2009: 62 million yen Year ended March 31, 2008: 47 million yen 102,192 Equity capital At March 31, 2009: 74,462 million yen At March 31, 2008: 85,431 million yen Cash flow from operating activities Cash flow from investing activities (20,417) 72.9 Cash flow from financing activities (5,692) (2,697) , Cash and cash equivalents at end of year 16,708 17, Dividends (Date of record) Interim Dividends per share Year-end Year Total dividend amount (Year) Payout ratio (Consolidated) Ratio of dividend to net assets (Consolidated) Year ended March 31, 2008 Year ended March 31, 2009 Year ending March 31, 2010 Yen Yen Yen Millions of yen % % (Est.) 2, , Forecast earnings for the year ending March 31, 2010 (April 1, 2009 to March 31, 2010) (Percentages represent year-on-year changes) Net income per Net Sales Operating profit Ordinary Profit Net income share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen First half 42,800 (10.6) 2,000 (34.6) 2,300 (29.9) 1,200 (30.2) Full year 88,000 (4.2) 4,800 (10.6) 5,200 (1.8) 2,

2 4. Other matters (1) Changes among significant subsidiaries (Changes among specific subsidiaries resulting in a change in the scope of consolidation): Newly consolidated companies: Excluded companies: 2 (ATAS Services Pte. Ltd., Scopus, S.A. ) Note: For details, please see Status of the Corporate Group on page 10. Yes (2) Changes in principles and practices in the preparation of the consolidated financial statements, or method of presentation (Changes in the basis of presentation of the consolidated financial statements) [1] Changes arising from revision of accounting standards: Yes [2] Other changes: Yes Note: For details please see Basis of Presentation of the Consolidated Financial Statements: Accounting Standards on page 22 and Changes in Basis of Presentation of the Consolidated Financial Statements on page 24. (3) No. of shares issued and outstanding (common stock) [1] No. of shares issued and outstanding at year-end (including treasury stock) At March 31, ,257,829 shares [2] No. of shares of treasury stock at year-end At March 31, ,257,829 shares At March 31, ,656,810 shares At March 31, ,647 shares Note: Please see Per-share data on page 37 for the number of shares on which the computation of consolidated earnings per share is based. Reference: Non-consolidated results 1. Summary of business results for the year ended March 31, 2009 (April 1, 2008 to March 31, 2009) (1) Operating results (Percentages represent changes from the previous term) Net sales Operating profit Ordinary profit Net income Millions of yen % Millions of yen % Millions of yen % Millions of yen % Year ended March 31, 2009 Year ended March 31, ,184 70,902 (9.5) 4.0 3,727 7,725 (51.8) (8.4) 4,305 8,363 (48.5) (2.3) 2,132 4,848 (56.0) (3.1) Year ended March 31, 2009 Year ended March 31, 2008 Net income per share Yen Diluted net income per share Yen (2) Financial position Year ended March 31, 2009 Year ended March 31, 2008 Reference: Total assets Millions of yen Millions of yen % Yen 107,226 Equity capital At March 31, 2009: 79,630 million yen At March 31, 2008: 83,856 million yen 2. Forecast earnings for the year ending March 31, 2010 (April 1, 2009 to March 31, 2010) Net Sales Millions of yen 99,129 First half 29,300 (12.3) Full year 61,000 (5.0) % Net assets Operating profit Millions of yen 1,400 3,600 79, , Ordinary profit Equity ratio % Millions of yen % Note: Explanation concerning appropriate use of the earnings forecast, and other matters to note (Percentages represent year-on-year changes) Net income Millions of yen (39.2) 1,800 (34.9) 1,100 (35.4) (3.4) 4,300 (0.1) 2, Net assets per share % 1, , Net income per share Earnings forecasts contained in this document and other forward-looking statements are forecasts based on available information at the date when the document was prepared and certain assumptions deemed to be reasonable. It is possible that various factors may cause actual future performance to differ significantly from the forecasts. Yen

3 1. Business Results (1) Analysis of Business Results (Business Results in the Year Ended March 31, 2009) The Japanese economy deteriorated rapidly as the effects of the worldwide financial crisis stemming from the subprime mortgage issue in the United States affected the real economy on a global scale. Rapid contraction of exports, which had been a driver of economic growth, led to generally disappointing corporate performance, and personal consumption dropped off as the employment situation tightened. Amid this difficult operating environment, we pursued Group growth strategies based on our new medium-term management plan, which began in April The entire company is working in unison to achieve sustained growth driven by global development of products and markets in every business segment and to improve profitability through the cultivation of new business and enhancement of our capacity to propose comprehensive solutions underpinned by cooperation with Group companies in Japan. During the year the company recorded sales of 91,812 million, down by 1.6% year-on-year. Operating profit fell by 46.3% to 5,371 million, ordinary profit declined by 49.8% to 5,293 million, and net income dropped by 63.7% to 2,214 million. The following is an overview by business division: Sales by business division Time Information System Business Information Systems Time Management Equipment Parking Systems Year ended March 31, 2008 (April 1, 2007, to March 31, 2008) (Unit: Millions of yen) Year ended March 31, 2009 Change (April 1, 2008, to March 31, 2009) Amount Ratio (%) Amount Ratio (%) Amount % 16,265 6,628 40, ,847 5,360 38, ,582 (1,267) (1,093) 22.0 (19.1) (2.7) Subtotal 62, , , Environment System Business Environmental Systems 20, , (1,741) (8.4) Clean Systems 9, , (1,018) (10.6) Subtotal 30, , (2,760) (9.1) Total 93, , (1,538) (1.6)

4 Time Information System Business Information Systems: Time & attendance (T&A), payroll, human-resource management, access control, cafeteria management systems Time Management Equipment: Time recorders, time stamps Parking Systems: Parking lot and bicycle-parking space management equipment, management services Information Systems Demand remains robust in the domestic market for this business, since companies are reviewing and rebuilding T&A systems to enhance legal compliance as the Ministry of Health, Labour and Welfare continues to issue notifications and strengthen guidance on appropriate management of working hours. Since the latter part of last year, however, the market environment has changed dramatically as the sudden economic downturn has further restricted investment, especially in the manufacturing sector. While potential demand is strong, orders have slowed markedly as customers postpone negotiations over new equipment. In response to this market environment, Amano has focused on proposing solutions that match customer needs, including reinforcing its marketing strategy of direct sales. Hardware sales fell by 864 million (12.1%) year-on-year and software sales declined by 480 million (11.2%), while sales generated by maintenance and supply operations rose by 108 million (3.5%). The reduction in hardware sales was due to falling orders for large-scale solutions, while the drop in software sales was attributable to falling demand from medium-sized businesses. Sales in the field of T&A systems declined by 851 million (8.0%) and those in the field of access control systems fell by 187 million (12.4%). Overseas, European sales increased with the addition of and strong performance by newly-consolidated French subsidiary Horosmart, S.A., acquired in January Sales declined in North America, but rose slightly in Asia. Total overseas sales leapt by 4,758 million (up 382.6% year-on-year). As a net result of the above, overall sales in this business division totaled 19,847 million, representing an increase of 22.0% from the previous year. Time Management Equipment Sales and demand in this segment remained sluggish during the period under review as time recorder store sales lost ground to Internet sales and the shift toward low-priced equipment accelerated in the Japanese market. The deteriorating economic climate further compounded the situation. Unit sales and sales revenue declined year-on-year in both the domestic and export markets. Aggregate domestic and export sales fell by 901 million (19.6%). Overseas, revenues declined in North America, Europe, and Asia. Overall, overseas sales were down by 579 million (a year-on-year decrease of 21.0%). As a result of the above, the time management equipment business division generated sales totaling 5,360 million, down by 19.1% from the previous year.

5 Parking Systems Although the impact of gasoline price hikes has lessened, the domestic parking lot market is maturing and the business environment for this segment remains challenging amid falling automobile sales and reduced vehicle use. Faced with such market conditions, the Company has stepped up efforts to make recommendations from the customers perspective on enhancing profitability and efficiency of parking lot management, while also focusing on creating demand for renewal projects, developing the promising bicycle parking lot system market, and cultivating the market for specialized gate systems. Sales of automobile and bicycle parking system devices decreased by 2,701 (16.0%) from a year earlier, while revenues from maintenance and supply operations rose by 303 million (3.8%). The number of parking spaces managed by Group subsidiary Amano Management Service Corporation in its commissioned parking lot management business increased by 23,400 (18.2%) from March 31, 2008, and the company s performance is making steady progress. Overseas, North American operations achieved sales growth, steadily improving their performance with the help of large orders secured by Amano McGann, Inc. European sales slipped as vigorous demand in the Spanish market fell away. In Asia, although South Korea continued to show strong results with double-digit growth in local-currency terms, exchange rate fluctuations resulted in reduced revenue on a yen basis. Overall, overseas sales rose by 703 million, up 5.9% year-on-year. As a net result of the above, the parking systems business division achieved sales totaling 38,968 million, representing a decrease of 2.7% from the previous 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, electrolytic water generators Clean Systems: Cleaning equipment, dry-care cleaning systems, cleanliness management services Environmental Systems The business environment in Japan remained challenging for this division as capital investment contracted in the face of declining capacity utilization levels associated with rapidly deteriorating conditions in the manufacturing sector especially in the automobile industry and a freeze on investment in new plant. In response to this economic environment, Amano has strengthened environmental management efforts aimed at compliance with environmental legislation and reduction of environmental impact, and reinforced marketing strategies relating to safety and security, In the large-scale systems segment, sales fell by a relatively small 191 million (2.5%) year-on-year, partly due to a backlog of orders for major projects in the early part of the fiscal year. On the other hand, standard equipment sales dropped by 871 million (12.4%) and revenues from maintenance and supply operations were down by 414 million (9.9%). In overseas operations, Japanese companies in China and the rest of Asia placed fewer orders for large-scale systems from the third quarter as the deteriorating economic environment impacted on their head offices in Japan. Consequently, overall sales declined by 72 million (5.9%). As a result of the above, the sales of this business division fell by 8.4% year-on-year, to 19,065 million.

6 Clean Systems This business division continued to face a difficult operating environment in Japan as companies opened fewer new commercial facilities and strove to reduce cleaning costs. Increasing restrictions on capital investment also had a negative effect on the factory market. In response to the prevailing conditions, the Company has devoted efforts to reigniting demand by strengthening its sales strategies. These efforts include launching products featuring new labor-saving, energy-saving, and cost-saving technologies, and offering cleaning contract services. In addition to falling demand for buffing machines, floor cleaning equipment sales were affected by restricted capital investment in floor cleaning machines for factories. In consequence, year-on-year sales declined by 497 million (16.7%) and revenues from maintenance and supply operations were down by 69 million (2.1%). Overseas sales in this segment slowed in North America, Europe, and Asia. Overall, sales decreased by 577 million (down 22.6% year-on-year). As a result of the above, sales generated in this segment totaled 8,569 million, down by 10.6 % from the previous year. Outlook for the Fiscal Year Ending March 31, 2009 With the global economic crisis showing no signs of improvement and contraction likely in the European and U.S. markets, downward pressure will also mount in Japan as declining exports hinder capital investment and rising unemployment continues to constrain personal consumption. Amid this economic environment, Amano Corporation and its group companies launched a new medium-term management plan covering a period of three years from April In line with the Group growth strategies set out in the plan, we will work to drive ongoing growth through the global development of markets and products in each of our business fields and to improve profitability by creating new business, and committing greater efforts to address accumulation business. The following business results are projected for the fiscal year ending March 31, 2010: Sales 88,000 million, operating profit 4,800 million, ordinary profit 5,200 million, and net income 2,700 million. The above projections assume currency exchange rates of US$1 to 95 and 1 to 125. (2) Analysis of Financial Condition Analysis of Assets, Liabilities, and Net Assets Assets Total assets at March 31, 2009, amounted to 102,192 million, down by 14,758 million from the previous fiscal year-end. This was chiefly due to a 8,098 million reduction in current assets resulting from factors including a 5,097 million drop in notes and accounts receivable, and a 6,659 million reduction in fixed assets largely attributable to a 5,181 million decrease in intangible fixed assets and a 2,384 million fall in investment securities.

7 Liabilities Total liabilities at fiscal year-end amounted to 26,797 million, down by 3,846 million year-on-year. This was attributable primarily to a 4,233 million decrease in current liabilities resulting from factors including a 3,079 million decline in notes and accounts payable and a 1,185 million drop in accrued income taxes. Net Assets Total net assets amounted to 75,394 million, down by 10,912 million from the previous fiscal year end. The principal factors behind this were a reduction of 2,180 million in retained earnings due to distribution of surpluses and changes in accounting standards at overseas consolidated subsidiaries, a drop of 3,004 million due to purchase of treasury stock, and a fall of 5,414 million resulting from foreign currency translation adjustments. Analysis of Cash Flows Consolidated cash and cash equivalents declined by 483 million, or 2.8%, year-on-year, to a total of 16,708 million at the year-end. The following is a description of the status of each type of cash flow during the year, and the underlying factors. Cash flow from operating activities Net cash provided by operating activities totaled 6,232 million, down by 33.4% from the previous year. Income before income taxes totaled 4,722 million, depreciation and amortization amounted to 4,768 million, and trade notes and accounts receivable decreased by 3,575 million, while income taxes paid totaled 3,597 million and accounts payable decreased by 2,584 million. Cash flow from investing activities Net cash used in investing activities was 2,453 million, indicating an increase of 88% over the previous year. Although proceeds from withdrawal of time deposits amounted to 4,169 million, payment for acquisition of intangible assets totaled 2,674 million, increase in time deposits amounted to 2,643 million, and payment for purchase of property, plant, and equipment was 1,924 million. Cash flow from financing activities Net cash used in financing activities totaled 5,692 million, indicating a decrease of 111.1%. This was chiefly due to payment for purchase of treasury stock amounting to 3,004 million and dividends paid by parent company of 2,539 million.

8 Reference: Trend of cash flow indicators At Mar. 31, 2005 At Mar. 31, 2006 At Mar. 31, 2007 At Mar. 31, 2008 At Mar. 31, 2009 Equity ratio (%) Fair value equity ratio (%) Ratio of cash flow to interest-bearing liabilities (%) Interest coverage ratio 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 liabilities 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. (3) Basic Policy on Distribution of Profits, and Dividend for This and Next Term Amano places great importance on 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. 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%. It also aims to improve capital efficiency by setting a target ratio of 60% for total distributions (return to shareholders), combining dividends and purchase of treasury stock. In line with this policy and considering this term s results, we plan to pay a year-end dividend of 13 per share, 4 lower than the amount paid at the end of the previous year. As a result, the annual per-share dividend will be 30 (including the 17 per share paid as the interim dividend), 4 lower than the previous year. This corresponds to a dividend payout ratio of 105.9% and a 2.9% ratio of dividends to net assets on a consolidated basis. Due to purchases of treasury stock, this year s total payout ratio (return to shareholders) will be 241.4%. 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 rationalization of production plant and equipment for the purpose of reducing costs and further improving product quality. With regard to the dividend for the next fiscal year, faced with an extremely difficult environment we will redouble our efforts to improve business performance, and will aim to pay a dividend for the year of 30 (interim dividend of 13, and year-end dividend of 17).

9 (4) Operating and Other Risk Among the matters relating to the qualitative information contained in these summary financial statements and relating to the consolidated financial statements, the following are those that could be envisaged as having a possible material impact on investors. Matters that are considered to be potential risk factors in the undertaking of business by the Amano Group either now or in the future 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 financial results (May 8, 2009). (i) Impact on earnings of changes in the operating environment The Amano Group uses its accumulation of unique technologies and know-how to provide customers with high-quality products, services and solutions, gaining large market shares in each sphere of business in Japan, North America, Europe, and Asia, and developing business globally. In the year ended March 31, 2009, the time information system business accounted for 69.9% of total sales, and the environment system business accounted for 30.1%. Before deduction of unallocated expenses the time information system business contributed 60.8% to operating profit, while the environment system business contributed 39.2%. In terms of weighted average sales over the most recent five years, time information system business accounted for 66.9% of total sales and for 71.3% of operating profit. 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 significant change in the demand structure or the creation of a new market, it can be expected that this will attract entry by entities in other industries or by other powerful competitors. In that event, if a competitor 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. (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 fluctuations in exchange rates when transaction amounts overseas are translated into yen. (iii) Information security In order to offer system solutions and undertake the application service provider business, the Amano Group handles confidential information such as personal information concerning customers or provided by customers. In view of this, the Group has developed a structure for the management of confidential information, implements thorough staff training, and uses software to prevent leaks of information for the purpose of preventing network access to confidential information and of preventing leaks of confidential information through the removal of data and information. To that end it has also established an Information Security Management Committee to ensure a foolproof structure. Nevertheless, in the event that an unforeseen situation 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.

10 2. Status of the Corporate Group The Amano Group comprises Amano Corporation and 28 subsidiaries, engaging primarily in the production and sale of time information systems and environment systems. The following chart sets out the principal business activities. The positioning of the companies in the business categories shown in the chart are in accordance with each company's principal business. Domestic Users AMANO AGENCY CORPORATION Amano Corporation's welfare business, non-life insurance agency business Export sales Domestic sales AMANO KOREA CORPORATION ATAS Services Pte. Ltd. was liquidated in May AMANO INTERNATIONA L TRADING (SHANGHAI) CO., LTD. AMANO TIME & AIR SINGAPORE PTE. LTD. Time information system business Environment system business AMANO MANAGEMENT SERVICE CORPORATION ENVIRONMENTAL TECHNOLOGY CO., AMANO MUSASHI ELECTRIC CORPORATION AMANO BUSINESS SOLUTIONS CORPORATION AMANO MAINTENANCE ENGINEERING CORPORATION Overseas Users Horoquartz Morocco, S.A. Pial Technology, S.A. Scopus, S.A was merged with Omnibadges, S.A. in January AMANO CINCINNATI CANADA INC. ATAS E&C SERVICES (M) SDN. BHD. AMANO EUROPE, N.V. Horoquartz, S.A. Omnibadges, S.A. AMANO McGann, INC. AMANO INTEGRATED SYSTEMS, INC. AMANO CINCINNATI, INC. AMANO PIONEER ECLIPSE CORPORATION AMANO THAI INTERNATIONA L CO., LTD. AMANO CLEANTECH MALAYSIA SDN. BHD. AMANO MALAYSIA SDN. BHD. AMANO EUROPE HOLDINGS, N.V. (Holding company) Horosmart, S.A. Supply of some products and parts for production AMANO USA HOLDINGS, INC. (Holding company) Amano Corporation (Production/sale of time information systems, environment systems) PT. AMANO INDONESIA

11 3. Business Policies (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) New Medium-Term Management Plan 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 2008 Amano inaugurated a new three-year medium-term management plan. An outline of the plan is set out below. (1) Basic Policies Building on the success of the previous management plan, which aimed at a strong profit structure and sustainable growth, under the new medium-term management plan the Group is positioning Amano McGann, Inc. of the U.S. and Horosmart, S.A. of France as key drivers for global development of parking system and information system businesses, particularly in the U.S. and Europe, and focusing on business expansion in Japan. Priority issues under the new plan are listed below. 1. Business Strategy Expanding business in the North American and European markets In North America we will merge Amano McGann s parking management systems with Amano Group systems and equipment, and expand the market for parking systems by strengthening direct sales structures to work closely with customers in proposing solutions.

12 In Europe we will merge Horosmart s French systems, equipment, and customer base with Amano Group systems and equipment. We will also expand our information system business in the French market and use this as a springboard for expansion into the wider European market, including the UK and the Benelux region. Expanding business in the Japanese market In the Japanese market we will reinforce ties with domestic group companies, particularly in the information system and parking system fields. We will also further expand our existing customer base and create new markets by strengthening our service and total solution capabilities and launching new products. 2. Enhancing Profitability Boosting profitability in the information system and parking system businesses In overseas markets we will increase profitability by implementing our business strategies for Amano McGann and Horosmart to maximize these profitable companies contribution to consolidated results. This will be achieved through increased sales in the North American and European markets, particularly sales of high-added-value products. As for the Japanese market, in the information systems field we will continue to standardize large-scale solution systems and increase added value by expanding sales of software to small and medium-sized businesses. In the parking systems field we will boost profitability by developing cost-competitive products and strengthening cost control for each site. 3. Improving Capital Efficiency Return on equity (ROE) As well as focusing on enhancing the profitability of all businesses, we will strive to improve capital efficiency through steps such as flexible purchasing of treasury stock and aim for ROE of 10.0% on a consolidated basis. (2) Numerical Targets From the latter part of 2008, the worldwide financial crisis stemming from the subprime mortgage issue in the U.S. seriously affected the real economy on a global scale. Since the business environment envisaged when we formulated the new medium-term management plan has changed dramatically, we intend to revise the numerical targets of 114,000 million in net sales and 12,700 million in operating profit that we originally set for the fiscal year ending March 31, Management Plan Target Results (Unit: Millions of yen) Year ending March 31, 2009 (results) Year ending March 31, 2010 (forecast) Year ending March 31, 2011 (forecast) Amount YOY YOY YOY change Amount Amount change (%) change (%) (%) Net sales 91,812 (1.6%) 88,000 (4.2%) Operating profit 5,371 (46.3%) 4,800 (10.6%) Operating profit to sales 5.9% 5.5% Ordinary profit 5,293 (49.8%) 5,200 (1.8%) Net income 2,214 (63.7%) 2, %

13 (3) Issues to Be Addressed The Company will take the following steps to achieve the goals set out in its revised new medium-term management plan. 1) Time information systems Information systems business Amid continuing efforts by labor authorities to more strictly monitor unpaid overtime and long working hours (overwork) in order to eradicate these practices, there is strong potential demand as companies establish T&A systems aimed at appropriately managing working hours. However, the rapidly deteriorating economic situation is restricting capital expenditure and market conditions are worsening week by week, with falling numbers of large-scale system projects and postponement of negotiations for new orders. In this market environment, we will focus on spurring latent demand in our T&A solutions business targeted at both large companies and the public sector, launching enhanced software and strengthening marketing structures by increasing system engineers. We also aim to expand business in the door security field, where the need to protect personal information has raised the priority placed on control of access to offices in which such information is handled. To enhance the profitability of this business we will cut costs by standardizing system software for our solutions business and expand sales of standard software packages to small and medium-scale business establishments, so as to boost earnings capacity. Overseas, we aim to merge the systems, equipment, and customer base of Horosmart, S.A. (France) with Amano systems and equipment to continue increasing business in the French market and using this as a springboard to extend sales channels across Europe as a means of expanding our business in this region. Parking systems business Although the impact of gasoline price hikes has lessened, the parking systems business continues to face a difficult environment as the parking lot market matures, the trend towards restraint in vehicle use becomes more pronounced, and vehicle sales decline. In this environment we will focus on spurring demand for replacement of existing parking lot equipment driven by growing use of electronic money. We will steadily meet the needs of existing customers by offering added-value products with in-built IT functions and forging ahead with comprehensive solutions business, including maintenance and parking lot management services. We will also increase sales of systems equipment to meet the market for bicycle parks that has arisen as a result of the problem of illegal parking of bicycles, and take further steps to expand the market for expressway-crossing safety gates and gate systems controlling entry and exit to and from sites such as factories. In order to boost profitability, we will make efforts to standardize special-order products and strengthen profit control for each site. Overseas, we aim to expand business and establish ourselves as the top manufacturer 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. We also aim to secure the largest market shares in Europe and Asia, proactively expanding our global operations.

14 2) Environment systems Environment systems business Potential demand in environment systems business remains steady, underpinned by companies efforts to comply with environment-related laws and regulations in their plants and to reduce the burden they place on the environment. However, the rapidly deteriorating business situation for manufacturers especially Japanese automakers is restricting capital expenditure, and uncertainty over future market conditions is growing. Given these circumstances, we will strengthen our capability of developing new products with less environmental impact, launch new products to match the reduction in size and the diversification 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 further strengthen profit control for each site in order to boost profitability. In overseas markets, we will expand business in Asia by building stronger ties with overseas Group companies in order to enhance our services to Japanese companies operating in China, Thailand, and other Asian countries. 3) Human resource development Recognizing that people are the most important management resource for 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 the challenges.

15 4 1 Consolidated Balance Sheets (Millions of yen) Period Fiscal year ended Fiscal year ended March 31, 2008 March 31, 2009 (At March 31, 2008) (At March 31, 2009) Change Item Amount Ratio Amount Ratio Assets Current assets Cash and bank deposits 20,544 18,719 ( 1,824 ) Notes and accounts receivable trade 28,748 23,651 ( 5,097 ) Marketable securities 1,000 1, Merchandise 1,584 ( 1,584 ) Finished goods 2,361 ( 2,361 ) Merchandise and finished goods 2,987 2,987 Work in process ( 284 ) Raw materials and supplies 3,055 2,957 ( 98 ) Deferred tax assets 1,376 1,313 ( 63 ) Other current assets 1,393 1, Allowance for doubtful accounts ( 150 ) ( 199 ) ( 48 ) Total current assets 60, , ( 8,098 ) Fixed assets Property, plant, and equipment Buildings and structures (net) Machinery and vehicles (net) Tools, furniture, and fixtures (net) 11,869 10,975 ( 894 ) 1,952 1,543 ( 409 ) 1,463 1,192 ( 271 ) Land 6,582 7, Lease assets (net) Construction in progress 183 1,257 1,074 Total property, plant, and equipment 22, , Intangible fixed assets Goodwill 12,637 7,401 ( 5,235 ) Software 4,512 4,357 ( 155 ) Software in progress 1,443 1,145 ( 298 ) Other Total intangible fixed assets 18, , ( 5,181 ) Investments and other assets Investment securities 6,909 4,524 ( 2,384 ) Long-term loans receivable ( 189 ) Claims in bankruptcy and similar claims ( 147 ) Fixed leasehold deposits 1,064 1, Deferred tax assets 2,232 2, Long-term deposits 1,500 2, Other 3,380 2,802 ( 577 ) Allowance for doubtful accounts ( 466 ) ( 455 ) 11 Total investments and other assets 15, , ( 2,273 ) Total fixed assets 56, , ( 6,659 ) Total assets 116, , ( 14,758 )

16 Item Period Fiscal year ended March 31, 2008 (At March 31, 2008) Amount Fiscal year ended March 31, 2009 (At March 31, 2009) Amount Liabilities % % Ratio Ratio (Millions of yen) Change Current liabilities Notes and accounts payable trade 12,039 8,959 ( 3,079 ) Short-term bank loans ( 147 ) Lease obligations Accrued income taxes 1, ( 1,185 ) Accrued bonuses 1,940 1,667 ( 273 ) Accrued officers' bonuses 45 5 ( 39 ) Other current liabilities 8,327 8, Total current liabilities 24, , ( 4,233 ) Long-term liabilities Long-term accounts payable Lease obligations Deferred tax liabilities ( 331 ) Accrued retirement benefits for employees 4,371 4,207 ( 163 ) Accrued officers' retirement benefits 714 ( 714 ) Other long-term liabilities ( 54 ) Total long-term liabilities 6, , Total liabilities 30, , ( 3,846 ) Net assets Shareholders' equity Common stock 18, , Capital surplus 19, , Retained earnings 49, , ( 2,180 ) Treasury stock ( 711 ) (0.6) ( 3,715 ) (3.6) ( 3,004 ) Total shareholders' equity 86, , ( 5,184 ) Valuation and translation adjustments Net unrealized gains (losses) on ( 303 ) (0.3) ( 369 ) available-for-sale securities Foreign currency translation adjustments ( 955 ) (0.8) ( 6,370 ) (6.2) ( 5,414 ) Total valuation and translation adjustments ( 889 ) (0.7) ( 6,673 ) (6.5) ( 5,783 ) Minority interests Total net assets 86, , ( 10,912 ) Total liabilities and net assets 116, , ( 14,758 )

17 4 2 Consolidated Statements of Income Item (Millions of yen) % % % Net sales 93, , ( 1,538 ) (1.6) Cost of sales 53, , ( 1,731 ) (3.2) Gross profit 40, , Selling, general and administrative expenses 29, , , Selling expenses 25,299 30,920 5,621 General and administrative expenses 4,692 3,902 ( 789 ) Operating profit 10, , ( 4,639 ) Non-operating profit Period Fiscal year ended March 31, 2008 (April 1, 2007 March 31, 2008) Amount Fiscal year ended March 31, 2009 (April 1, 2008 March 31, 2009) Ratio Amount Ratio Amount Interest income ( 24 ) Dividends income Other ( 14 ) Total non-operating profit ( 36 ) Non-operating expenses Interest expenses ( 19 ) Foreign exchange losses Other ( 70 ) Total non-operating expenses Ordinary profit 10, , ( 5,241 ) Extraordinary income Gain on sale of fixed assets ( 1) Gain on sale of investment securities Gain on abolishment of retirement benefit plan Other 1 1 Total extraordinary income Extraordinary losses Loss on disposal of fixed assets ( 42 ) Loss on sale of investment securities Loss on valuation of investment securities Loss on sale of shares in consolidated subsidiaries 92 ( 92 ) Loss on valuation of investments in capital of subsidiaries and affiliates Loss on write-down of golf club memberships ( 10 ) Special retirement expenses Loss on compensation for damages Other ( 79 ) Total extraordinary losses Income before income taxes 10, , ( 5,405 ) Income taxes current 4, , ( 1,743 ) Income taxes deferred (150) (0.2) Minority interests ( 0) Net income 6, , ( 3,890 ) Change Ratio (46.3) (4.4) (49.8) (53.3) (43.5) (151.6) (0.3) (63.7)

18 4 3 Consolidated Statement of Changes in Shareholders' Equity Year ended March 31, 2008 (April 1, 2007 March 31, 2008) (Millions of yen) Shareholders' equity Common stock Capital surplus Retained earnings Treasury stock Total shareholders' equity Balance at March 31, ,239 19,521 45,860 (794) 82,826 Changes during the year Dividends from surplus (2,731) (2,731) Reduction in retained earnings due to increase in companies to which the equity method is applied (7) (7) Net income 6,104 6,104 Purchase of treasury stock (6) (6) Disposal of treasury stock Net changes in items other than shareholders' equity Total changes during the year 46 3, ,494 Balance at March 31, ,239 19,567 49,225 (711) 86,321 (Millions of yen) Net unrealized gains (losses) on availablefor-sale securities Valuation and translation adjustments Foreign currency translation adjustments Total valuation and translation adjustments Minority interests Total net assets Balance at March 31, (356) ,620 Changes during the year Dividends from surplus (2,731) Reduction in retained earnings due to increase in companies to which the equity method is applied (7) Net income 6,104 Purchase of treasury stock (6) Disposal of treasury stock 135 Net changes in items other than shareholders' equity Total changes during the year Balance at March 31, 2008 (448) (599) (1,047) 239 (808) (448) (599) (1,047) 239 2, (955) (889) ,307

19 Year ended March 31, 2009 (April 1, 2008 March 31, 2009) (Millions of yen) Shareholders' equity Common stock Capital surplus Retained earnings Treasury stock Total shareholders' equity Balance at March 31, ,239 19,567 49,225 (711) 86,321 Changes during the year Dividends from surplus (2,714) (2,714) Net income 2,214 2,214 Purchase of treasury stock (3,004) (3,004) Reduction in retained earnings due to change in accounting policies applied to foreign subsidiaries* Reduction in retained earnings from merger of consolidated and nonconsolidated subsidiaries Net changes in items other than shareholders' equity Total changes during the year (1,642) (1,642) (37) (37) (2,180) (3,004) (5,184) Balance at March 31, ,239 19,567 47,044 (3,715) 81,136 (Millions of yen) Net unrealized gains (losses) on availablefor-sale securities Valuation and translation adjustments Foreign currency translation adjustments Total valuation and translation adjustments Minority interests Total net assets Balance at March 31, (955) (889) ,307 Changes during the year Dividends from surplus (2,714) Net income 2,214 Purchase of treasury stock (3,004) Reduction in retained earnings due to change in accounting policies applied to foreign subsidiaries* Reduction in retained earnings from merger of consolidated and nonconsolidated subsidiaries Net changes in items other than shareholders' equity Total changes during the year Balance at March 31, 2009 (1,642) (37) (369) (5,414) (5,783) 56 (5,727) (369) (5,414) (5,783) 56 (10,912) (303) (6,370) (6,673) ,394 * This is due to adoption of Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements (ASBJ Practical Issues Task Force No.18, issued on May 17, 2006).

20 4 4 Consolidated Statements of Cash Flows I (Millions of yen) Fiscal year ended Fiscal year ended Period March 31, 2008 March 31, 2009 Change (April 1, 2007 (April 1, 2008 Item March 31, 2008) March 31, 2009) Amount Amount Amount Cash Flows from Operating Activities 1. Income before income taxes 10,127 4,722 ( 5,405 ) 2. Depreciation and amortization 3,914 4, Amortization of goodwill Increase (decrease) in provision for accrued retirement benefits 102 ( 141 ) ( 244 ) 5. Increase (decrease) in allowance for doubtful accounts 83 ( 19 ) ( 102 ) 6. Interest and dividend revenue ( 332 ) ( 310 ) Equity in (earnings) losses of affiliates ( 47 ) ( 62 ) ( 15 ) 8. Interest expenses ( 19 ) 9. Foreign currency translation loss (gain) Loss (gain) on sale of fixed assets ( 2 ) ( 4 ) Loss on disposal of fixed assets ( 42 ) 12. Loss (gain) on sale of investment securities 31 ( 31 ) 13. Loss (gain) on valuation of investment securities Loss (gain) on sale of shares of subsidiaries 92 ( 92 ) 15. Loss on valuation of investments in capital of affiliates Loss on write-down of golf club memberships ( 10 ) 17. Extra retirement payment Loss on compensation for damages Gain on abolishment of retirement benefit plan ( 281 ) ( 281 ) 20. (Increase) decrease in trade notes and accounts receivable ( 1,510 ) 3,575 5, (Increase) decrease in inventories 1, ( 714 ) 22. Increase (decrease) in accounts payable 45 ( 2,584 ) ( 2,629 ) 23. Other ( 516 ) ( 2,591 ) ( 2,074 ) Subtotal 13,607 9,501 ( 4,105 ) 24. Receipts from interest and dividends ( 30 ) 25. Interest paid ( 56 ) ( 31 ) Income taxes paid ( 4,578 ) ( 3,597 ) 981 Net cash provided by operating activities 9,362 6,232 ( 3,129 ) II 1. Payment for acquisition of securities ( 2,000 ) ( 2,191 ) ( 191 ) 2. Proceeds from redemption of securities 1,000 2, Payment for purchase of property, plant, and equipment ( 3,203 ) ( 1,924 ) 1, Proceeds from sale of property, plant, and equipment 1, ( 1,085 ) 5. Payment for acquisition of intangible assets ( 2,512 ) ( 2,674 ) ( 161 ) 6. Payment for acquisition of investment securities ( 2,084 ) ( 1,822 ) Proceeds from sale of investment securities Proceeds from redemption of investment securities 1,000 2,500 1, Payment for acquisition of shares of subsidiaries resulting in change in scope of consolidation ( 12,169 ) 12, Payment for business transfers ( 561 ) ( 282 ) Long-term loans to third parties ( 104 ) ( 2 ) Collection of loans receivable Increase in time deposits ( 5,708 ) ( 2,643 ) 3, Proceeds from withdrawal of time deposits 5,356 4,169 ( 1,186 ) 15. Other ( 554 ) Net cash used in investing activities ( 20,417 ) ( 2,453 ) 17,963 III Cash Flows from Financing Activities 1. Proceeds from short-term bank loans Repayment for short-term bank loans ( 18 ) ( 2 ) Proceeds from long-term debt ( 247 ) 4. Repayment for long-term debt ( 488 ) ( 142 ) Payment for acquisition of treasury stock ( 6 ) ( 3,004 ) ( 2,997 ) 6. Proceeds from sale of treasury stock 135 ( 135 ) 7. Repayment of finance/lease obligations ( 79 ) ( 79 ) 8. Dividends paid by parent company ( 2,643 ) ( 2,539 ) Dividends paid to minority interests ( 18 ) ( 23 ) ( 4 ) Net cash used in financing activities ( 2,697 ) ( 5,692 ) ( 2,995 ) IV Effect of exchange rate changes on cash and cash equivalents 254 1,423 1,169 V Net increase (decrease) in cash and cash equivalents ( 13,498 ) ( 490 ) 13,008 VI Cash and cash equivalents at beginning of year 30,690 17,192 ( 13,498 ) VII Net increase (decrease) in cash and cash equivalents due to merger of consolidated and nonconsolidated subsidiaries VIII Cash and cash equivalents at end of period 17, ,708 ( )