summary financial statements (consolidated) for …...72.89 net assets 91,000 13.00 6.1 yen cash...

May 8, 2007

Company Name: Amano Corporation Listed on: TSE, OSESecurities code: 6436 URL http://www.amano.co.jp/Representative: Kaoru Haruta, President and CEOInquiries: Keizo Ueno, Executive Director Tel: (045） 439-1504

General Manager, Administration DivisionScheduled date of ordinary general meeting of shareholders: June 28, 2007Scheduled date of start of dividend payments: June 29, 2007Scheduled date of filing of securities report: June 28, 2007

（Amounts less than 1 million yen are rounded down）1. Summary of business results for the year ended March 31, 2007 (April 1, 2006 to March 31, 2007)(1) Operating results (Percentages represent changes from the previous term)

Millions of yen (% change) Millions of yen (% change) (% change) (% change)Year ended

March 31, 2007Year ended

March 31, 2006

Yen Yen % % %Year ended


March 31, 2006Reference:

(2) Financial position

Millions of yen Millions of yen % YenAt March 31, 2007At March 31, 2006

Reference:

(3) Cash flows

Millions of yen Millions of yen Millions of yen Millions of yenYear ended


March 31, 2006

2. Dividends

Yen Yen Millions of yen ％％

3. Forecast earnings for the year ending March 31, 2008 (April 1, 2007 to March 31, 2008)(Percentages represent year-on-year changes)

Millions of yen Millions of yen Millions of yen ％ Millions of yen ％ Yen

First half 8.5

Full year 5.8

30.00 38.2

Ordinary profitNet sales

35.2

40.4

26.00

8.1

5.7

Net income

36.12

78.47

Net income pershare

(2,016)

(2,133)

83,62078,732

74.474.8

74.24

72.76

Ordinary profit Net income

Equity in earnings of affiliates Year ended March 31, 2007: – Year ended March 31, 2006: –

Equity capital At March 31, 2007: 82,984 million yen At March 31, 2006: –

1,033.61

7.4

7.8

111,487105,262

Total assets

12.0

11.8

Equity ratio Net assets per share

5,915

0.8

15.8

5,961

Payout ratio(Consolidated)

Ratio of dividendto net assets

(Consolidated)

Cash flow fromoperating activities

981.92

Interim

5,100

(4,279)6,048

7,101

7.7

13.00

(8,834)

Dividends per share

8.5

10,800

2,080

％

17.00

17.00

％

Operating profit

30.00

5.5

44,600

10,700

74.29

72.89

Net assets

91,000

13.00

6.1

Yen

Cash flow frominvesting activities

Net income per share

Net sales

7.685,769

79,743

6.4

5.19.0

10,143

9,537

Operating profit

2,900

6,300

9.4

9.3

34,402

2.7

30,690

5,100

Summary Financial Statements (Consolidated) for Year Ended March 31, 2007

Year ended March 31,2008 (Est.)

Year ended March 31,2007

Year ended March 31,2006

(Date of record)

13.00

13.00 2,408

Year-end Year

Diluted net income per share Ratio of net incometo equity capital

Ratio of ordinaryprofit to total assets

Ratio of operatingprofit to net sales

9,581

3.0

Millions of yen Millions of yen

6.5

7.0

10,205

Cash flow fromfinancing activities

Cash and cash equivalentsat end of year

Total dividendamount (Year)

－ 1 －

4. Other matters

No

[1] Changes arising from revision of accounting standards: Yes [2] Other changes: No Note: For details, please see Changes in Basis of Presentation of Consolidated Financial Statements on page 22 .

(3) No. of shares issued and outstanding (common stock)

Reference: Non-consolidated results1. Summary of business results for the year ended March 31, 2007 (April 1, 2006 to March 31, 2007)(1) Operating results (Percentages represent changes from the previous term)

Millions of yen (% change) Millions of yen (% change) Millions of yen (% change) Millions of yen (% change)Year ended


March 31, 2006

Yen YenYear ended


March 31, 2006

(2) Financial position

Millions of yen Millions of yen % Yen

At March 31, 2007

At March 31, 2006

2. Forecast earnings for the year ending March 31, 2008 (April 1, 2007 to March 31, 2008)(Percentages represent year-on-year changes)

Millions of yen (% change) Millions of yen (% change) Millions of yen (% change) Millions of yen (% change) (% change)

First half 5.6Full year 3.9

Note: Explanation concerning appropriate use of the earnings forecast, and other matters to note

Note: Please see Per-Share Information on page 33 for in the number of shares on which the computation of consolidated earnings per share is based.

Earnings forecasts contained in this document and other forward-looking statements are forecasts based on availableinformation at the date when the document was prepared, and may contain numerous uncertainties. It is possible thatvarious risks and unstable factors that may arise in the future will cause actual future performance to differ from the

Diluted net income per shareNet income per share

Reference: Equity capital At March 31, 2007: 81,788 million yen At March 31, 2006: –

Net incomeper share

101,621

34,9008,9004,200

(1) Changes among significant subsidiaries (Changes among specific subsidiaries as a result of changes in the scope of consolidation):

(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] No. of shares issued and outstanding at year-end (including treasury stock) At March 31, 2007 81,257,829 At March 31, 2006 81,257,829

5,200

Net assets per share

29.8964.77

985.32

2,400

77.377.7

3.7

8,431

8,211

2.768,187

63,619

1,018.70

Net sales

7.2

5.3

Total assets

62.36

64.92

Operating profit Ordinary profit Net income

5,246

(4.6)

18.5

5,0038,563

8,457

1.3

7.5

62.31

64.80

Net assets Equity ratio

71,2004.94.4

105,807

8,700

Net sales

81,78878,973

4,100

[2] No. of shares of treasury stock at year-end At March 31, 2007 971,355 At March 31, 2006 1,167,156

2.73.9

Net income

4.83.2

Operating profit Ordinary profit

－ 2 －

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1. Business Results (1) Analysis of Business Results During the year under review there was a continued improvement in corporate earnings and growth in capital investment in the Japanese economy, buoyed by expansion in economies overseas and by the relaxed monetary environment domestically. The economy held firm during the year, backed by these and other factors such as a modest uptrend in employee incomes, which caused consumer spending to remain robust. Amid this operating environment, throughout the Group we pursued the building of “A strong profit structure and sustainable growth”, the management concept that underlies our third medium-term management plan, which began in April 2005. Particular effort was devoted to strengthening our marketing capability by broadening the customer base and expanding our service business, and to enhancing cost-competitiveness by such means as cutting fixed costs, reducing prime costs, and raising productivity. During the year the Company achieved growth in both revenues and profits. We generated net sales totaling ¥85,769 million, up by 7.6% year-on-year, operating profit of ¥10,143 million, up by 6.4%, and ordinary profit of ¥10,205 million, up by 6.5%. As a result, the Company posted net income of ¥5,961 million, representing an increase of 0.8% from the previous year. The following is an overview by business division. Sales by business division

(Unit: Millions of yen) Year ended

March 31, 2007 (April 1, 2006, to March 31, 2007)

Year ended March 31, 2006

(April 1, 2005, to March 31, 2006)

Change

Amount Ratio (%) Amount Ratio (%) Amount %

Time Information System Business

Information Systems 14,673 17.1 13,909 17.4 764 5.5

Time Management Equipment 7,296 8.5 7,385 9.3 (89) (1.2)

Parking Systems 33,737 39.4 31,032 38.9 2,705 8.7

Subtotal 55,708 65.0 52,327 65.6 3,380 6.5

Environment System Business

Environmental Systems 20,171 23.5 17,020 21.4 3,150 18.5

Clean Systems 9,889 11.5 10,394 13.0 (505) (4.9)

Subtotal 30,060 35.0 27,415 34.4 2,645 9.6

Total 85,769 100.0 79,743 100.0 6,025 7.6

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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 division, as the enforcement of the Financial Products Transaction Law (Japanese equivalent of SOX in the U.S.) has expedited the building of internal control systems, and there is increasingly well-entrenched compliance-consciousness with regard to accurate identification of working hours and the protection of personal information. Amid this, business reforms directed towards T&A management based on IT control have been spreading to large corporations and core local government bodies, and Amano has been meeting this demand trend by enhancing the merchantability and sales structures for large-scale solutions, stepping up its approaches to the public-sector market, and incorporating IC cards to propose comprehensive solutions for access control systems, and has also devoted efforts to developing new markets. Sales in the field of T&A systems rose by ¥453 million from the previous year, or 4.5%, while in the field of access control systems they increased by ¥240 million, or 21.1%. Broken down by product, hardware sales were up by ¥689 million, or 12.3%, year-on-year; software sales fell by ¥255 million, or 6.0%; and sales generated by maintenance and supply operations increased by ¥317 million, or 12.1%. Major contributing factors to the increase in hardware sales were large-scale orders received from large corporations and the public-sector market. The principal reason for the decline in software sales was a slippage of demand for renewal among small and medium-scale business establishments.

Overseas, sales grew in Europe but declined in North America and Asia, totaling ¥1,076 million, down by 6.6% year-on-year. As a net result of the above, overall sales in this business division totaled ¥14,673 million, representing an increase of ¥5.5% from the previous year.

• Time Management Equipment Sales in this segment within Japan remained sluggish during the year, with demand for time recorders showing no signs of a recovery. Domestic performance in this business division was helped by strong sales of the TimeP@CK time recorder with PC spreadsheet software, boosted by an enhanced product lineup. Nevertheless, overall unit sales slipped and caused sales revenues to fall, whereas in export sales time recorders and time stamps both recorded growth in sales. In regard to overseas business performance, revenues declined in Europe and Asia but rose in North America, bolstered by a bulk purchase of time stamps. Overall, overseas sales totaled ¥3,244 million, up by 2.3% year-on-year. As a result of the above, the Time Management Equipment Division generated sales totaling ¥7,296 million, down by 1.2% from the previous year.

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• Parking Systems In the domestic market the revision of the Road Traffic Act in June 2006 has brought about a rise in the number of small-scale parking lots and an increase in the operating ratios of existing parking lots. As a result, and with the added impetus of robust demand for bicycle parking lot systems, the market has been expanding at a remarkable pace. Amid this market environment, Amano took steps to meet the increasingly varied nature of demand, including the diversification of settlement methods and the accommodation of motorcycles. To this end we further strengthened our structures in such areas as production, development, and sales, and engaged in the proactive marketing of comprehensive proposals for ensuring efficient and strategic parking-lot management of a kind that befits the era of the network. Broken down by product, sales of system devices increased by ¥1,273 million, or 8.5%, from the previous year, but revenues from maintenance and supply operations declined by ¥163 million, or 2.1%. This fall in maintenance and supply revenues is attributable in part to the fact that maintenance revenues fell in reaction to ¥900 million of extraordinary replacement demand for bill readers for new bills that occurred in the previous first half, in spite of the fact that sales of supplies such as parking-lot tickets and service tickets were up because of the increase in the number of parking-lots and in parking-lot operating ratios referred to above. In addition, a strong performance was achieved by the parking-lot operation and management business of Group subsidiary Amano Management Service Corporation, which posted a 25.1% year-on-year increase in revenues. With regard to overseas operations, favorable sales growth was achieved in North America, Europe, and Asia. In North America, results were impacted positively by the acquisition of ITS (now renamed AUI), while in the Asian region performance in Korea and Malaysia remained good, and performance in Europe was also robust. In consequence, sales overall totaled ¥6,668 million, up by 21.4% year-on-year. The net result of the above developments was that sales achieved in this division totaled ¥33,737 million, representing an increase of 8.7% from the previous year.

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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

This business division continued to benefit from a sustained expansion of demand, buoyed by brisk capital investment in domestic manufacturing industry. In the standard equipment segment, sales were up by ¥839 million, or 13.1%, year-on-year, led by sales of small dust collectors and oil mist collectors. Sales of large-scale systems rose substantially, up by 25.4% year-on-year, to ¥1,444 million, backed by widespread demand for new installations and for capacity expansion in the manufacturing sector, and by steps taken to comply with laws to enforce environmental conservation. Revenues from maintenance and supply operations rose by ¥639 million, or 18.6%, as growing awareness of safety and performance maintenance led to growth in service-related sales. Overseas operations performed well, primarily because of orders for large-scale systems received from Japanese companies in China and Thailand. Sales were up by 25.9% year-on-year, to ¥1,071 million. As a result of the above, the sales of this business division totaled ¥20,171 million, representing a significant increase of 18.5% from the previous year.

• Clean Systems In this business division, within Japan major convenience stores continued to switch to ceramic flooring materials, and this led to a decline in acquisitions of small buffing machines for new stores. In the sphere of large-scale stores the number of store-openings decreased, and stores continued to diversify their floor surfacing, with the result that sales of large buffing machines also fell. In contrast, sales to industrial plants of scrubbing and cleaning machines grew robustly, bolstered by the introduction of new machines into factories. Overall, sales of cleaning equipment decreased by ¥254 million, or 7.6%, from the previous year, but revenues from maintenance and supply operations were up by ¥170 million, or 5.8%, as cleaning management business performed strongly. Overseas, sales in this segment declined in North America and Asia, causing overall sales to decline by 9.2% year-on-year, to ¥2,903 million. As a result of the above, the sales generated in this segment totaled ¥9,889 million, down by 4.9% from the previous year.

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(2) Analysis of Financial Condition Consolidated cash and cash equivalents declined by ¥3,712 million, or 10.8%, from the previous year, to a total of ¥30,690 million at the year-end. The principal factor behind this was an increase in the amount of funds being invested. The following is a description of the status of each type of cash flow during the year, and the underlying factors. Cash flow from operating activities

Net cash provided by operating activities totaled ¥7,101 million, up ¥1,053 million, or 17.4% over the year before. This was attributable primarily to a decline in income taxes paid.

Cash flow from investing activities

Net cash used in investing activities was ¥8,834 million, up ¥4,554 million, or 106.4% over the year before. The principal factors behind this were an increase in outflows for the purchase of intangible fixed assets and an increase in placements of funds in time deposits.

Cash flow from financing activities

Net cash used in financing activities totaled ¥2,016 million, up ¥117 million, or 5.5% over the year before. This was attributable principally to factors such as a decline in cash outflows for the repayment of long-term borrowings.

Reference: Trend of cash flow indicators

At Mar.31,2003

At Mar.31,2004

At Mar.31,2005

At Mar.31,2006 At Mar.31,2007

Equity ratio (%) 74.8 75.5 72.5 74.8 74.4

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

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

0.4 0.3 0.3 0.4 0.4

Interest coverage ratio 88.4 165.7 255.8 88.1 125.3

Notes: Equity ratio: Equity capital/Total assets Fair value equity ratio: Gross market capitalization/Total assets Ratio of cash flow to interest-bearing liabilities (%): Interest-bearing liabilities/Cash flow from

operating activities Interest coverage ratio: Cash flow from operating activities/Interest payments Assumptions

1. All indicators are calculated on the basis of consolidated financial values. 2. Gross market capitalization is calculated by multiplying the closing price of the Company’s shares

at the year-end by the number of shares of common stock issued and outstanding at the year-end (less treasury stock).

3. Cash flow from operating activities refers to cash flow from operating activities posted under the consolidated statements of cash flows. Interest-bearing debt refers to those of the liabilities stated in the consolidated balance sheets on which interest is paid. Interest payments equate with interest paid stated in the consolidated statements of cash flows.

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(3) Basic Policy on Distribution of Profits, and Dividend for This and Next Term For Amano, one of the issues to which it devotes most importance is its policy for dividends to shareholders. Fundamental to this is its policy for the return of profit to shareholders, based on maintaining a stable ordinary dividend of ¥26 annually (¥13 interim and ¥13 year-end), together with appropriate results-based distributions and flexible purchasing of treasury stock. For dividends it was decided to change to a criterion of maintaining a payout ratio of at least 35% on a consolidated basis, as of the previous term. In addition, the Company’s medium-term goal is to maintain a ratio of dividend to net assets of at least 2.5%. In line with this policy, we plan to pay a year-end dividend for the year of ¥17 per share, which constitutes an increase of ¥4 from the ¥13 paid as the previous year-end dividend, and reflects the Company's business performance. As a result, the annual dividend will be ¥30, including the ¥13 per share paid as the interim dividend, which corresponds with a payout ratio of 40.4% on a consolidated basis, and a 3.0% ratio of dividends to net assets. Retained earnings will be used to fund effective investment aimed at the fundamental enhancement of the Company’s capacity to conduct its business operations. This will include the expansion and strengthening of existing business fields, strategic investment in growth fields, and spending on research and development, as well as the 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, we will continue 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. With respect to matters that are considered to be potential risk factors in the undertaking of business by the Amano Group either now or in the future, they are estimated to the greatest extent possible, and the risk factors are then addressed and eliminated in the course of business activities. Matters relating to the future are those that are adjudged to be so as of the date of the release of these financial results (May 8, 2007). (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, 2007, in terms of sales the time information system business accounted for 65.0% of the total, and the environment system business accounted for 35.0%. With respect to their contribution to operating profit, before deduction of unallocated expenses the time information system business contributed 70.9%, while the environment system business contributed 29.1%. In terms of weighted average sales over the most recent five years, time information system business accounted for 65.0% of total sales and for 75.7% of operating 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 that 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 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 a committee to manage the protection of personal information, so as 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.

2. Status of the Corporate Group

Shareholding

Products

Shareholding

Products

Shareholding

Products

* Name changed from PIONEER ECLIPSE CORPORATION in June 2006

　* Name changed from AMANO USA, INC. in April 2006

The Amano Group comprises Amano Corporation and 31 subsidiaries, engaging primarily in the production and sale otime 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'sprincipal business. (Note: all these companies are consolidated subsidiaries)

* Name changed from ACCUTIME CORPORATION in May 2006

　 Shareholding

Partial supply of products& production parts

Dom

estic sales

Export sales

* Name changed from TIME & PARKING SYSTEMS, INC. in May 2006

* Name changed from TIME & PARKING SOLUTIONS OF CINCINNATI, INC. in June 2006

Domestic Users

Am

ano Corporation (Production/sale of tim

e information system

s, environment system

s)

Overseas U

sers

Time inform

ation system business

Environment system

business

AMANO AGENCY CORPORATION Amano Corporation's welfare business,

nonlife insurance agency business

AMANOBUSINESS

SOLUTIONSCORPORATION

AMANOMANAGEMENT

SERVICECORPORATION

ENVIRONMENTALTECHNOLOGY CO., LTD.

AMANO MUSASHIELECTRIC

CORPORATION

AMANOMAINTENANCEENGINEERINGCORPORATION

ATASSERVICES PTE.

LTD.

AMANOCINCINNATI

CANADA INC.

ATAS E&CSERVICES (M)

SDN. BHD.

AMANO USAHOLDINGS,INC. (Holding

company)

AMANO KOREACORPORATION

AMANOINTERNATIONAL

TRADING(SHANGHAI)

CO., LTD.

AMANO TIME &AIR SINGAPORE

PTE. LTD.

AMANOELECTRONICSEUROPE, N.V.

AMANO TIME &PARKING

SOLUTIONS OFST. LOUIS, INC.

AMANOCINCINNATI, INC.

AMANO PIONEERECLIPSE

CORPORATION

AMANOMALAYSIASDN. BHD.

PT.AMANOINDONESIA

AMANO PIONEERCREDIT

CORPORATION

AMANO TIME &PARKING

SOLUTIONS OFATLANTA, INC.

AMANO TIME &PARKING

SOLUTIONS OFCINCINNATI, INC.

AMANOCLEANTECHMALAYSIA SDN. BHD.

AMANO U.S.A,INC.

- 10 -

- 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) Medium- and Long-Term Management Strategy and Targeted Management Indicators Amano and its Group companies each continue the tradition of evolving continuously in response to changes in the times, while maintaining the following four immutable strategies of the Amano Group.

1) Emphasis on Time & Ecology business fields, and enhancement of core business 2) Being a niche leader in the business fields in which we excel 3) Constant restructuring 4) Management based on cash flow

Based on these four fundamental strategies, in April 2005 Amano inaugurated its third three-year medium-term management plan. With regard to business results in the year under review, the second year of the plan, net income fell slightly below the plan target, at 99.4%, but most of the second-year plan targets were met. The details are set out below.

(Unit: Millions of yen) Year ended March 2007

(Plan) Year ended March 2007

(Actual) Year ending March 2008

(Plan)

Amount YOY change (%) Amount YOY change

(%) Amount YOY change (%)

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

Operating profit 10,100 5.9 10,143 6.4 10,700 5.5

Operating profit to sales 12.0% 11.8% 11.8%

Ordinary profit 10,000 4.4 10,205 6.5 10,800 5.8

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

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

1) Consolidated operating profit to sales: 13% or more 2) ROE: 8.5% 3) Earnings per share: ¥88 or more

(3) Outlook for Next Fiscal Year, and Issues to be Addressed The outlook for the Japanese economy points to ongoing buoyancy in the corporate sector and modest growth in consumer spending, backed by the strength of economies overseas and by the calming of crude-oil prices. We believe that the sustained economic expansion will continue. Amid this operating environment, Amano and its Group companies are pledged to further strengthen collaboration, create new markets in each of their business fields, engage in vigorous sales activity in close liaison with customers, supply high-value-added products through the globalization of their development structure, and provide a wide range of solutions and services. In parallel with this, we will endeavor to achieve our goal of building a strong profit structure and sustainable growth. In the coming fiscal year we will implement the business strategies set out below in accordance with our third three-year medium-term management plan. 1) Time Information System Business Information systems business is experiencing growth in demand for the creation of systems

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

Given the positive impact on business of this market environment, we aim to expand T&A

solutions business targeted at both large companies and the public sector, doing so through the further enhancement and expansion of marketing and merchandising capabilities. We are also committed to expanding business in the field of door security in the same way.

In addition, as a means of enhancing the profitability of this business we will cut costs by

standardizing system software for our solutions business, so as to both maintain and expand earnings capacity.

In parking systems business the market environment is changing dramatically. Developments

have included the diversification of means of settling payments, the start of outsourcing to the private sector of the supervision of parking violations, the introduction of systems into bicycle parks, and the imposition of a mandatory requirement to provide supplementary motorcycle parks.

Amid this market environment we will be strengthening our approaches to the supply of

systems to the market for bicycle parks that has arisen as a result of the problem of illegal parking of bicycles, and also for motorcycle parks. We will also expand business by strengthening our comprehensive proactive market capabilities, targeting the market for the outsourcing of management services, which is continuing to expand.

Overseas, we aim to secure the largest market shares in North America, Europe, and Asia,

expanding operations by enhancing our marketing and merchandising capabilities.

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2) Environment Systems Business In environmental systems business, heavy demands are being made on companies to fulfill

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

Given these circumstances, we aim to expand the scale of operations in this segment by

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

In overseas markets we will respond to the launch by Japanese automotive and related

companies into China and other Asian markets, and will enhance our marketing capacity and engineering structure in the local markets.

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

(Unit: Millions of yen)

Net sales Operating profit Ordinary profit Net income

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

Year ended March 31, 2007 85,769 10,143 10,205 5,961

Change 6.1% 5.5% 5.8% 5.7%

4–1 Consolidated Balance Sheets(Millions of yen)

Amount AmountAssets ％％Current assets 69,770 62.6 65,105 61.9 4,665

Cash and bank deposits 33,690 34,402 ( 712 )

Notes and accountsreceivable—trade 24,635 20,914 3,721

Marketable securities 500 10 489Inventories 8,458 7,626 831Deferred tax assets 1,254 1,262 ( 7 )Other current assets 1,336 1,004 331

Allowance for doubtfulaccounts ( 105 ) ( 116 ) 11

Fixed assets 41,716 37.4 40,157 38.1 1,559Property, plant and equipment 21,552 19.3 20,995 19.9 556

Buildings and structures 11,228 11,351 ( 122 )Machinery and vehicles 1,670 1,561 109Tools, furniture and fixtures 2,093 1,666 426Land 5,825 5,769 55Construction in progress 734 646 87

Intangible fixed assets 6,409 5.8 4,676 4.4 1,733Goodwill － 1,656 ( 1,656 )Goodwill 1,834 － 1,834Software 2,830 1,942 888Software in progress 1,685 1,019 666Others 59 58 0

Investments and other assets 13,754 12.3 14,484 13.8 729Investment securities 6,026 6,850 ( 823 )Long-term borrowings 562 638 ( 75 )

Claims in bankruptcy andsimilar claims 410 255 154

Fixed leasehold deposits 958 935 22Deferred tax assets 1,900 1,769 130Long-term deposits 1,500 1,500 －Others 2,817 2,801 16

Allowance for doubtfulaccounts ( 422 ) ( 267 ) ( 155 )

100.0 100.0 6,224Total assets 111,487 105,262

Change

Ratio

Fiscal year endedMarch 31, 2007

(At March 31, 2007)


(At March 31, 2006)

Ratio

Period

Item

- 14 -

(Millions of yen)

Liabilities ％％Current liabilities 22,043 19.8 20,323 19.3 1,719

11,485 9,637 1,848Short-term bank loans 434 467 ( 33 )Accrued income taxes 2,270 2,146 123Accrued bonuses 1,903 1,974 ( 70 )Accrued officers' bonuses 47 － 47Other current liabilities 5,901 6,097 ( 195 )

Long-term liabilities 5,823 5.2 5,721 5.4 102Long-term bank loans 688 692 ( 3 )Accrued retirement benefits foremployees 4,269 4,251 18

Accrued officers' retirementbenefits 738 649 89

Deferred tax liabilities 61 70 ( 9 )Other long-term liabilities 65 56 8

27,866 25.0 26,044 24.7 1,821Minority interests

－－ 485 0.5 ( 485 )

－－ 485 0.5 ( 485 )Shareholders’ equityCommon stock －－ 18,239 17.3 ( 18,239 )Capital surplus －－ 19,438 18.5 ( 19,438 )Retained earnings －－ 42,036 39.9 ( 42,036 )

－－ 798 0.8 ( 798 )

－－ ( 830 ) (0.8) 830Treasury stock －－ ( 950 ) (0.9) 950

－－ 78,732 74.8 ( 4,251 )

－－ 100.0

82,826 74.3 －－ 82,826Common stock 18,239 16.4 －－ 18,239Capital surplus 19,521 17.5 －－ 19,521Retained earnings 45,860 41.1 －－ 45,860Treasury stock ( 794 ) －－ ( 794 )

157 －－ 157Net unrealized gains (losses) onavailable-for-sale securities 514 －－ 514

Foreign currency translationadjustments ( 356 ) －－ ( 356 )

636 0.6 －－ 636

83,620 75.0 －－100.0 －－

(105,262)

83,620111,487

(0.3)

105,262

Total net assetsTotal liabilities and net assets

Net assets

(0.7)

0.1

0.4

111,487

Valuation and translation adjustments

Minority interests

Owners’ equity

Change

Amount AmountRatio Ratio


(At March 31, 2007)


(At March 31, 2006)

Notes and accounts payable—trade

Total liabilities, minority interests, andshareholders' equity

Total liabilities

Total minority interests

Total shareholders' equity

Minority interests in consolidatedsubsidiaries

Net unrealized gains (losses) on othersecuritiesForeign currency translation adjustment

Period

Item

- 15 -

4–2 Consolidated Statements of Income(Millions of yen)

% % %

85,769 100.0 79,743 100.0 6,025

47,920 55.9 42,943 53.9 4,977

Gross profit 37,848 44.1 36,800 46.1 1,048

27,705 32.3 27,262 34.1 442

Selling expenses 23,795 22,974 821General and administrativeexpenses 3,909 4,288 ( 379 )

Operating profit 10,143 11.8 9,537 12.0 606

631 0.7 611 0.7 20

Interest income 151 85 66

Dividends income 65 50 15

Other 414 475 ( 61 )

569 ) 0.6 567 0.7 2

Interest expense 61 60 0

Amortization of goodwill － 320 ( 320 )

Amortization of goodwill 320 － 320

Other 188 187 1

Ordinary profit 10,205 11.9 9,581 12.0 624

97 0.1 422 0.6 ( 325 )

Gain on sale of property andequipment 61 332 ( 270 )

Gain on sale of investmentsecurities 21 55 ( 34 )

Other 14 35 ( 20 )

76 0.1 302 0.4 ( 225 )

Loss on disposal of propertyand equipment 45 67 ( 21 )

Loss on sale of property andequipment － 20 ( 20 )

Loss on sale of shares inconsolidated subsidiaries 24 － 24

Loss on write-down of golfclub memberships 6 － 6

Factory transfer expenses － 212 ( 212 )

Income before income taxes 10,226 11.9 9,702 12.2 524

Income taxes–current 4,049 4.7 3,845 4.8 203

Income taxes–deferred 53 (196) 250

Minority interests 162 0.2 137 0.2 25

Net income 5,961 7.0 5,915 7.4 45

3.3

0.4

(76.9)

(74.7)

RatioAmount

7.6

2.8

11.6

Ratio Amount

Fiscal year endedMarch 31, 2007(April 1, 2006–

March 31, 2007)


March 31, 2006)

0.0

Extraordinary losses

Net sales

Cost of sales

Selling, general andadministrative expenses

(0.2)

Non-operating profit

Non-operating expenses

Extraordinary income

6.5

5.4

Change

Amount Ratio

6.4

1.6

0.8

5.3

18.5

(127.5)

Period

Item

- 16 -

4–3 Consolidated Statement of Changes in Shareholders' Equity

(Millions of yen)

Balance at March 31, 2006 18,239 19,438 42,036 (950) 78,765

Changes during the year

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

Officers' bonuses by appropriationof retained earnings (92) (92)

Increase in retained earnings frommerger of consolidated andnonconsolidated subsidiaries

39 39

Net income 5,961 5,961

Purchase of treasury stock (8) (8)

Disposal of treasury stock 82 163 246

Net changes in items other thanshareholders' equity

－ 82 3,823 155 4,061

Balance at March 31, 2007 18,239 19,521 45,860 (794) 82,826

(Millions of yen)

Balance at March 31, 2006 798 (830) (32) 485 79,217

Changes during the year

Dividends from surplus (2,084)

Officers' bonuses by appropriationof retained earnings (92)

Increase in retained earnings frommerger of consolidated andnonconsolidated subsidiaries

39

Net income 5,961

Purchase of treasury stock (8)

Disposal of treasury stock 246

Net changes in items other thanshareholders' equity (284) 474 190 151 341

(284) 474 190 151 4,402

Balance at March 31, 2007 514 (356) 157 636 83,620

Totalnet assets

Total changes during the year

Shareholders' equity

Common stock Capital surplus Retained earnings Treasury stock

Total changes during the year

Totalshareholders'

equity

Valuation and translation adjustments

Year ended March 31, 2007 (April 1, 2006–March 31, 2007)

Foreign currencytranslation

adjustments

Total valuation andtranslation

adjustments

Minorityinterests

Unrealized gains(losses) on

available-for-salesecurities

- 17 -

4–4 Consolidated Statement of Capital Surplus and Retained Earnings(Millions of yen)

19,293

Gain from disposal oftreasury stock 145

19,438

38,296

Net income 5,915

Cash dividends paid 2,075Officers' bonuses 99Total 2,175

42,036

Retained earnings

Amount

Item

Fiscal year endedMarch 31, 2006(April 1, 2005–March 31, 2006)

Retained earnings at end ofyear

Decrease in retained earnings

Increase in retained earnings

Capital surplus at beginningof year

Retained earnings atbeginning of year

Increase in capital surplus

Capital surplus

Balance of capital surplus atend of year

- 18 -

4–5 Consolidated Statements of Cash Flows(Millions of yen)

I1. 10,226 9,702 5242. 3,234 2,815 418

3. 16 154 ( 137 )

4. 143 ( 79 ) 2225. ( 217 ) ( 136 ) ( 81 )6. 61 60 07. ( 211 ) ( 46 ) ( 164 )8. ( 61 ) ( 332 ) 2709. 45 67 ( 21 )10. － 20 ( 20 )11. ( 21 ) ( 55 ) 3412. － 1 ( 1 )13. 24 － 2414. 6 － 615. ( 3,200 ) ( 366 ) ( 2,834 )16. ( 594 ) ( 129 ) ( 465 )17. 1,563 ( 1,852 ) 3,41518. 41 954 ( 913 )

Subtotal 11,056 10,780 27619. 201 130 7120. ( 56 ) ( 68 ) 1121. ( 4,100 ) ( 4,793 ) 692

Net cash provided by operating activities 7,101 6,048 1,053

II1. ( 2,192 ) ( 1,719 ) ( 472 )2. 72 617 ( 544 )3. ( 2,754 ) ( 1,725 ) ( 1,029 )4. ( 258 ) ( 1,634 ) 1,3755. 41 153 ( 112 )6. 10 31 ( 21 )7. ( 774 ) － ( 774 )8. － ( 26 ) 269. 8 22 ( 13 )10. ( 6,000 ) － ( 6,000 )11. 3,000 － 3,00012. 12 － 12

Net cash used in investing activities ( 8,834 ) ( 4,279 ) ( 4,554 )

III1. 35 194 ( 158 )2. ( 35 ) ( 188 ) 1533. 36 364 ( 327 )4. ( 249 ) ( 855 ) 6055. ( 8 ) ( 53 ) 456. 246 489 ( 243 )7. ( 2,015 ) ( 2,071 ) 568. ( 26 ) ( 13 ) ( 13 )

Net cash used in financing activities ( 2,016 ) ( 2,133 ) 117

V ( 24 ) ( 184 ) 160V ( 3,773 ) ( 550 ) ( 3,223 )VI 34,402 34,900 ( 497 )VII 61 － 61

VIII－ 52 ( 52 )

IV 30,690 34,402 ( 3,712 )

Amount

Change

Amount


March 31, 2006)

Interest and dividend revenueInterest expenses

Amount


March 31, 2007)

Loss on sale of shares of consolidated subsidiariesLoss on write-down of golf-club memberships

Cash Flows from Operating Activities

Gain on sale of fixed assetsLoss on disposal of fixed assetsLoss on sale of fixed assets

Income before income taxesDepreciation and amortizationIncrease (decrease) in provision for accrued retiremenbenefitsIncrease (decrease) in allowance for doubtful accounts

Foreign currency translation gain (loss)

Receipts from interest and dividendsInterest paidIncome taxes paid

(Increase) decrease in trade notes and accounts receivable(Increase) decrease in inventoriesIncrease (decrease) in accounts payableOthers

Gain on sale of investment securitiesLoss on sale of investment securities

Cash Flows from Investing ActivitiesPayment for purchase of property and equipmentProceeds from sale of property and equipmentPayment for acquisition of intangible assetsPayment for acquisition of investment securitiesProceeds from sale of investment securitiesProceeds from maturities of investment securitiesPayment for business transfersLoans to third partiesCollection of loansIncrease in time depositsRepayment of time depositsOthers

Cash Flows from Financing ActivitiesProceeds from short-term bank loans

Proceeds from sale of treasury stockDividends paid by parent companyDividends paid to minority interests

Repayment for short-term bank loansProceeds from long-term debtRepayment for long-term debtPayment for acquisition of treasury stock

Net increase (decrease) in cash and cash equivalents due tochange in scope of consolidationCash and cash equivalents at end of period

Net increase (decrease) in cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at beginning of yearNet increase (decrease) in cash and cash equivalents due tomerger of consolidated and nonconsolidated subsidiarie

Period

Item

- 19 -

4–(6) Basis of Presentation of the Consolidated Financial Statements

1. Scope of consolidation

(1) 24

(2)

Reasons for exclusion from the scope of consolidation

2. Application of the equity method

(1) 0

(2) Name of affiliated companies to which the equity method is not applied SHANGHAI QI-AN MACHINERYEQUIPMENT CO., LTD．

Reason why the equity method is not applied:

3. Fiscal years of consolidated subsidiaries

4. Accounting standards

(1) Valuation standards and methods for significant assets

(a) Securities:

(b) Derivatives: Stated at fair value

(c) Inventories: Principally stated at cost based on the periodic average method

Available-for-sale securities with market prices are stated at fair value as of the balance sheet date. Netunrealized gains or losses on these securities are recorded directly in shareholders’ equity, and costs ofsecurities sold are computed using the moving average method.

Available-for-sale securities without market prices are stated at cost based on the moving average

Number of non-consolidated subsidiaries to which theequity method is applied, and number of affiliated

Companies to which the equity method is not applied are excluded because they have an immaterial impacton net income (loss), retained earnings, etc., and they are of little importance.

The fiscal year-end of overseas subsidiaries is December 31. Their financial statements as of that date are usedin the preparation of the consolidated financial statements, and necessary adjustments are made to theconsolidated accounts in cases in which significant transactions take place between that date and theconsolidated balance sheet date.

Number of consolidatedNames of major consolidatedsubsidiaries:

Non-consolidated subsidiaries are all small in scale, and their combined total assets, sales, net income, andretained earnings (according to the Group’s holding in them) in every case would have no material impacton the consolidated financial statements.

These are set out in section 2: “Status of the Corporate Group” on page10.As of the year under review, AMANO USA, INC., by means ofacquisition, was included within the scope of consolidation, andAMANO ASIA MANAGEMENT PTE., LTD. was liquidated andexcluded. In the latter case, profit/loss applicable to the period up tothe liquidation has been included.

7 companies: AMANO SOFTWARE ENGINEERING (SHANGHAI)CO., LTD., AMANO ECO TECHNOLOGY CORPORATION,AMANO SOFTWARE ENGINEERING R&D EUROPE, N.V.,AMANO SYSTEMS KYUSHU CORPORATION, AMANO TIMEBUSINESS CORPORATION, AMANO TIME & PARKING SPAIN,S.A., @PARK KOREA CO., LTD.AMANO SOFTWARE ENGINEERING USA, Inc. merged withconsolidated subsidiary AMANO CINCINATTI INC. and was excludedfrom among non-consolidated subsidiaries as of the year under review.

Names of non-consolidatedsubsidiaries:

- 20 -

(2)

(a) Property, plant and equipment

(b) Intangible fixed assets Straight-line method

(3) Accounting for significant reserves

(a) Allowance for doubtful accounts

(b) Accrued bonuses

(c) Accrued officers’ bonuses

(d) Accrued retirement benefits for employees

(e) Accrued officers’ retirement benefits

(4) Translation of significant foreign-currency assets and liabilities

(5) Accounting for significant leases

(6) Other significant matters affecting the preparation of the consolidated financial statementsNational and local consumption taxes are accounted for based on the tax-exclusion method

The assets, liabilities, income, and expenses of overseas subsidiaries are translated into yen at the spotexchange rate on the final day of their accounting periods, and any differences are included in either the

All finance leases, other than those that are deemed to transfer ownership of the leased assets to lessees, aretreated for accounting purposes by the same method as that applied to ordinary operating leases.

To provide against possible losses from doubtful accounts such as receivables and loans, allowances forgeneral receivables are provided using a rate determined by past loss experience, and allowances forcertain doubtful accounts are provided for the estimated amounts considered to be uncollectible afterindividually studying the collectibility of the accounts

To provide for payment of employee bonuses, the amount of bonuses estimated to be paid in the year isstated as accrued bonuses.

To provide for payment of officers’ bonuses, the amount of bonuses estimated to be paid in the year isstated as accrued bonuses.

To provide for payment of employee retirement benefits, the Company has set aside a reserve based onestimated retirement benefit liabilities and pension assets at the end of the fiscal year.Actuarial differences are charged to income from the fiscal year following the one in which they arise,using the straight-line method over a fixed number of years (10) within the average remaining period ofservice of Company employees at the time they arise in each fiscal year.

To provide for payment of retirement benefits to officers, in accordance with in-house rules the amountthat would be required to be paid assuming all officers were to retire at the fiscal year-end is accrued inan amount equal to 100% of the liability.

Claims and obligations denominated in foreign currencies are translated into yen at the spot exchange rate onthe final day of the consolidated accounting period, and any differences are treated as either gains or losses.

Software for sale by the Company is depreciated by the straight-line method based on the estimatedperiod during which it can be sold (3 years), while software for internal use by the Company and itsdomestic consolidated subsidiaries is depreciated by the straight-line method over its useful life (5SFAS No. 142 (“Goodwill and Other Intangible Assets”) is applied to the goodwill of U.S. consolidated

Depreciation methods for important depreciable assets

Declining-balance method, except for buildings (excluding equipment ancillary to the buildings)acquired since April 1, 1998, for which the straight-line method is used.Useful lives and residual values are computed by the Company and its domestic consolidatedsubsidiaries in accordance with the same criteria as the method stipulated in the Corporation Tax Law.Overseas consolidated subsidiaries employ the methods prescribed by the accounting standards of thecountries in which they are located.

Useful lives are computed by the Company and its domestic consolidated subsidiaries in accordancewith the same criteria as the method stipulated in the Corporation Tax Law. Overseas consolidatedsubsidiaries employ the methods prescribed by the accounting standards of the countries in which they

- 21 -

5. Scope of funds included in the consolidated statements of cash flows

4–(7) Changes in Basis of Presentation of the Consolidated Financial Statements

Changes in Accounting Policy

Accounting standard relating to officers' bonuses

Accounting standard relating to the statement of net assets in the balance sheets

These changes have had no impact on profit (loss).

The amount of net assets, which equates with what was previously categorized as "Shareholders' equity,"totaled ¥82,984 million.

The regulations for the preparation of consolidated financial statements have been revised, and thereforethese consolidated financial statements were prepared in accordance with the revised regulations.

Funds include cash on hand, demand deposits, and short-term investments maturing or redeemable withinthree months after acquisition that are highly liquid, readily convertible into cash, and exposed to low pricefluctuation risk.

As of the year under review, the Accounting Standard for Directors' Bonuses (Accounting Standards Boardof Japan Statement No. 4, November 29, 2005) is being applied.

In consequence, in comparison with the situation under the method used previously, operating profit,ordinary profit, and net income before taxes and other adjustments each declines by ¥47 million.

As of the year under review, the Accounting Standard for Presentation of Net Assets in the Balance Sheet(ASBJ Statement No. 5, Accounting Standards Board, December 9, 2005) and the related Guidance onAccounting Standard for Presentation of Net Assets in the Balance Sheet (ASBJ Guidance No. 8, December9, 2005) are being applied.

- 22 -

4–(8) Notes to the Consolidated Financial StatementsConsolidated balance sheets

¥28,619 million

Matured trade notes at the end of the year

¥477 million ¥50 million

¥1 million

Consolidated statements of income

Principal selling, general and administrative expenses Principal selling, general and administrative expenses¥1,256 million ¥1,348 million

¥47 million ¥1,039 million

¥988 million ¥80 million

¥89 million ¥10,758 million

¥11,353 million

Consolidated statements of cash flows

¥33,690 million 34,402 million

(¥3,000) million 34,402 million

¥30,690 million

¥528 million¥520 million

¥1,048 million¥274 million

Fixed assetsTotal assetsCurrent liabilities

Notes receivableNotes payableOther current liabilities

Cash and cash equivalentsTime deposits deposited formore than 3 months

Breakdown of increases in assets and liabilities resulting fromtransfers of businesses

Current assets

Cash and cash equivalents

Cash and bank depositsCash and bank deposits

Transfer to accrued bonuses

Retirement benefit expense

Transfer to accrued officers’retirement benefitsRetirement benefit expense

Transfer to accrued bonusesTransfer to accrued officers'bonuses

Fiscal year ended March 31, 2007(As of March 31, 2007)


Accumulated depreciation of property, plant and equipment Accumulated depreciation of property, plant and equipment

Matured trade notes at the end of the year were settled onthe date of clearance. Since financial institutions were notopen for business on the final day of the year, the followingmatured trade notes at the end of the year are included inthe following categories.

(Notes payable relating to plant and equipment)

Fiscal year ended March 31, 2007(April 1, 2006– March 31, 2007)

¥29,926 million




Reconciliation of year-end balance of cash and cashequivalents and amounts stated in the consolidated balancesheets

Reconciliation of year-end balance of cash and cashequivalents and amounts stated in the consolidated balancesheets

Salaries, wages and other payrollcosts

Salaries, wages and other payrollcosts

Transfer to accrued officers’retirement benefits

- 23 -

Consolidated statement of changes in shareholders' equity

Year ended March 31, 2007 (April 1, 2006, to March 31, 2007)

1. Type and number of shares issued and outstanding

2. Type and number of shares of treasury stock

Notes 1.2.

3. Share subscription rightsNot applicable

4. Dividends(1) Dividends paid

　　 Share type　　 At March 31, 2006　　 Increase Decrease At March 31, 2007

　　 Share type　　 At March 31, 2006　　　 Increase Decrease At March 31, 2007

¥17

Resolution

Ordinary generalmeeting ofshareholders,June 29, 2006

Share type

Common stock

Retainedearnings

Total dividend Dividend per shareDividendfunding

¥1,364 million

March 31, 2006

¥13

June 30, 2006

September 30, 2006 December 4, 2006

(2) Dividends for which the date of record falls in the current fiscal year, but the effective date is after the end of the fiscal year.

Board of directorsmeeting,November 7, 2006

Common stock ¥1,043 million

Dividend per share

Common stock (shares) 81,257,829 – – 81,257,829

Common stock (shares)　　　 1,167,156　　　　　　 5,199　　　　　　 201,000　　　　 971,355

¥1,041 million ¥13

Total dividend Effective dateDate of record

There was an increase in common stock held as treasury stock as a result of purchases of odd-lot shares.There was a decrease in common stock held as treasury stock as a result of exercises of stock options.

Resolution

Ordinary generalmeeting ofshareholders,June 28, 2007

Share type

Common stock

Date ofrecord

Effectivedate

Mar. 31,2007 June 29, 2007

- 24 -

Segment Informationa. Segment information by business (Millions of yen)

I Net sales and operating profitNet sales(1) To customers 55,708 30,060 85,769 – 85,769(2) Intersegment – – – – －

Total 55,708 30,060 85,769 – 85,769Operating expenses 46,625 26,332 72,957 2,667 75,625Operating profit 9,082 3,728 12,811 ( 2,667 ) 10,143

IIAssets 43,970 16,461 60,432 51,055 111,487Depreciation 2,419 429 2,849 385 3,234Capital expenditures 3,931 988 4,919 116 5,036

(Millions of yen)

II Net sales and operating profitNet sales(1) To customers 52,327 27,415 79,743 – 79,743(2) Intersegment – – – – －

Total 52,327 27,415 79,743 – 79,743Operating expenses 43,284 24,571 67,855 2,350 70,206Operating profit 9,043 2,844 11,887 ( 2,350 ) 9,537

Ⅱ

Assets 36,376 14,547 50,924 54,337 105,262Depreciation 2,026 400 2,426 389 2,815Capital expenditures 3,253 638 3,892 129 4,021

Notes 1.

Assets, depreciation, capital expenditures

Assets, depreciation, capital expenditures

As described below, the business segments are formed by the demarcation of business into time information systembusiness and environment system business.From among the units and activities relating to sales and maintenance within the Company it is not possible toapportion selling expenses to particular sales categories, and thus for internal administrative purposes, segmentation hasbeen carried out by business segment.

Consolidationtotal

(April 1, 2005– March 31, 2006)Time

informationsystems

Environmentsystems Total Consolidation


Fiscal year ended March 31, 2006

Timeinformation

systems

Environmentsystems Total Consolidation Consolidation

total

- 25 -

2. Principal products in each business segmentSales category

Information systems

Time managementequipment

Parking systems

Environmentalsystems

Clean systems

3.

Fiscal year ended March 31, 2007 ¥2,667 million


4.



Among assets, the principal Company-wide assets included in the “Consolidation” item include workingcapital (cash and securities) at the parent company, long-term investment funds (investment securities andlong-term deposits), and assets relating to administrative divisions

Automated fee systems, access control systems, parking lot managementsystems, bicycle parking systems, time registers, parking towermanagement systems, Internet parking guidance systems, parking lot totalmanagement services

Industrial vacuum cleaners, standard dust collectors, oil mist collectors,fume collectors, large dust collection systems, deodorization systems,high-temperature hazardous-gas removal systems, pneumatic powderconveyance systems, environmental equipment monitoring/maintenancesupport systems, electrolytic water cleaning systems, alkaline electrolyticwater industrial cleaning systems

Commercial vacuum cleaners, road and industrial sweepers, automaticfloor scrubbers, high-speed burnishers, dry-care cleaning systems, carpetcleanliness system, chemical products, supplies and accessories

Among operating expenses, the principal unallocated operating expenses included in the “Consolidation”item relate to divisions conducting Company-wide administrative activities, such as the parent companyGeneral Affairs Department.

Environmentsystem business

Business segment Principal products

Time & attendance (T&A) systems, payroll systems, human-resourcemanagement systems, cafeteria systems, access control systems, proximityIC card solutions, system time recorders, attendance/human-resource andpayroll ASP services, time distribution and authentication services

PC-connectable time recorders, computerized time recorders, standardelectronic time recorders, electronic time stamps, numbering machines,patrol recorders

Time informationsystem business

- 26 -

b. Segment information by geographical area (Millions of yen)

Japan Other Asia NorthAmerica Europe Total Consolidati

on total

INet sales(1) 70,803 4,117 9,347 1,500 85,769 – 85,769(2) 2,082 100 378 102 2,663 ( 2,663 ) –

Total 72,886 4,217 9,725 1,602 88,432 ( 2,663 ) 85,769Operating expenses 60,781 3,790 9,530 1,468 75,570 55 75,625Operating profit 12,105 427 195 133 12,862 ( 2,719 ) 10,143

II Assets 45,997 3,656 9,182 2,972 61,809 49,677 111,487

(Millions of yen)

Japan Other Asia NorthAmerica Europe Total Consolidati

on total

INet sales(1) 65,878 3,499 9,018 1,347 79,743 – 79,743(2) 1,690 38 367 170 2,267 ( 2,267 ) –

Total 67,569 3,538 9,385 1,517 82,011 ( 2,267 ) 79,743Operating expenses 56,251 3,153 9,244 1,418 70,069 136 70,206Operating profit 11,317 384 140 98 11,942 ( 2,404 ) 9,537

II Assets 39,428 2,818 7,745 2,493 52,484 52,777 105,262

Notes 1. The national and regional demarcations are in accordance with the degree of geographical proximity.

2. Principal countries and regions in each division

(1) Other Asia: Singapore, Malaysia, South Korea, China

(2) North America: United States, Canada

(3) Europe: Belgium

3. Among operating expenses, the principal unallocated operating expenses included in the “Consolidation” item

relate to divisions conducting Company-wide administrative activities, such as General Affairs Department of

the parent company.

Fiscal year ended March 31, 2007 ¥2,667 millionFiscal year ended March 31, 2006 ¥2,350 million

4. Among assets, the principal Company-wide assets included in the “Consolidation” item include working capital

(cash and securities) at the parent company, long-term investment funds (investment securities and long-term

deposits), and assets relating to administrative divisions.

Fiscal year ended March 31, 2007 ¥51,055 millionFiscal year ended March 31, 2006 ¥54,337 million

To customersIntersegment

To customersIntersegment



Consolidation

Net sales and operating profit

Consolidation

Net sales and operating profit

(April 1, 2005– March 31, 2006)

- 27 -

c. Overseas sales (Millions of yen)

I Overseas sales 4,736 9,365 1,544 225 15,871

II Consolidated net sales 85,769

IIIProportion of consolidatednet sales accounted for byoverseas sales

5.5 % 10.9 % 1.8 % 0.3 % 18.5 %

(Millions of yen)

I Overseas sales 3,798 9,035 1,403 187 14,424

II Consolidated net sales 79,743

IIIProportion of consolidatednet sales accounted for byoverseas sales

4.8 % 11.3 % 1.8 % 0.2 % 18.1 %

2. The national and regional demarcations are in accordance with the degree of geographical proximity.

3. Principal countries and regions in each division

(1) Other Asia: Singapore, Malaysia, South Korea, China

(2) North America: United States, Canada

(3) Europe: Belgium

(4) Other regions: Central and South America

Lease transactions

Transactions with related parties

Fiscal year ended March 31, 2007 (April 1, 2006 – March 31, 2007)

None

Fiscal year ended March 31, 2006 (April 1, 2005 – March 31, 2006)

None

Notes 1. Overseas sales comprise sales by the Company and its consolidated subsidiaries to countries and regions other than Japan.

Disclosure has been omitted, since the importance of these transactions is insufficient to warrant their disclosure in summaryfinancial statements.


(April 1, 2006– March 31, 2007)

Other Asia North America Europe Other regions Total

(April 1, 2005– March 31, 2006)


Other Asia North America Europe Other regions Total

- 28 -

Deferred tax accounting

1 1

Deferred tax assets (¥ million) Deferred tax assets (¥ million)186 183

773 801

298 277

1,729 1,708

477 371

76 89

84 72

520 500

　Deferred tax assets(subtotal) 4,146 Deferred tax assets

(subtotal) 4,006

Valuation allowance (604) Valuation allowance (384)　Total deferred tax assets 3,542 　Total deferred tax assets 3,622

Deferred tax liabilities Deferred tax liabilities

(22) (22)

(351) (545)

(75) (91)　Total deferred tax liabilities (449) 　Total deferred tax liabilities (660)　Net deferred tax assets 3,093 　Net deferred tax assets 2,961

2 2

Statutory tax rate 40.6％ Statutory tax rate 40.6％(Adjustments) (Adjustments)

0.6 0.4

(0.3) (0.2)

　 0.7 0.8

　

(1.0) (2.1)

0.5

　Actual tax rate 37.6Actual tax rate 40.1

Realization of tax benefits onoperating lossesTax credit for research anddevelopment expenses

Other

Tax credit for research anddevelopment expenses

Realization of tax benefits onoperating losses

Increase (decrease) in valuation reserve

(1.5)

OtherOther

Reserve for advanceddepreciation of buildingUnrealized gain on othersecurities

Unrealized gain on othersecurities

Reserve for advanceddepreciation of building

Valuation loss on investmentsecuritiesSurplus on allowance fordoubtful accounts

Accrued enterprise tax Accrued enterprise taxAccrued bonuses not deductibleuntil paidAccrued officers’ retirementbenefits not deductible untilAccrued retirement benefits foremployees not deductible untilpaidLoss carried forwardValuation loss on investmentsecuritiesSurplus on allowance fordoubtful accounts

Dividend and other nontaxableincome

Inhabitant tax per capita


Breakdown of principal origins of deferred tax assetsand liabilities

Breakdown of principal origins of deferred tax assetsand liabilities

Accrued bonuses not deductibleuntil paidAccrued officers’ retirementbenefits not deductible untilAccrued retirement benefits foremployees not deductible untilpaidLoss carried forward

Other

Principal components of significant differences arisingbetween the statutory tax rate and the effective tax rate

Entertainment and othernondeductible expenses

Entertainment and othernondeductible expenses

Other

Principal components of significant differences arisingbetween the statutory tax rate and the effective tax rate


Dividend and other nontaxableincome

Inhabitant tax per capita

0.5

(1.7)

(0.2)

Other

- 29 -

Securities

Fiscal year ended March 31, 2007 (As of March 31, 2007)

1. Trading securities None

2. Held-to-maturity bonds (Market price applicable) None

3. Other securities (Market price applicable) (Millions of yen)

(1) Stocks 1,517 2,400 883

(2) Bonds 500 500 0

(3) Other 20 41 21

Subtotal 2,038 2,942 904

(1) Stocks 520 503 ( 16 )

(2) Bonds – – –

(3) Other 1,500 1,478 ( 22 )

Subtotal 2,020 1,981 ( 38 )

4,058 4,923 865

4. Other securities sold during the year (April 1, 2006, to March 31, 2007)(Millions of yen)

Sale price Gain on sale Loss on sale

51 21 －

5. Principal securities with no fair market value, and their value stated in the consolidated balance sheet

(1) Held-to-maturity bonds None

(2) Shares of subsidiaries and affiliates ¥430 million

(3) Other securitiesUnlisted stocks ¥673 millionPreferred securities ¥500 million

Balance-sheet amount Unrealized gains(losses)Type

Total

Securities for which balance-sheetamount exceeds acquisition cost

Securities for which balance-sheetamount does not exceed

acquisition cost

Acquisition cost

- 30 -

Fiscal year ended March 31, 2006 (As of March 31, 2006)

1. Trading securities None

2. Held-to-maturity bonds (Market price applicable) None

3. Other securities (Market price applicable) (Millions of yen)

(1) Stocks 2,017 3,369 1,352

(2) Bonds 500 501 1

(3) Other 51 96 45

Subtotal 2,568 3,967 1,399

(1) Stocks 20 17 ( 3 )

(2) Bonds – – –

(3) Other 1,500 1,448 ( 51 )

Subtotal 1,520 1,465 ( 54 )

4,088 5,433 1,344

4. Other securities sold during the year (April 1, 2005, to March 31, 2006)(Millions of yen)

Sale price Gain on sale Loss on sale

153 55 1

5. Principal securities with no fair market value, and their value stated in the consolidated balance sheets

(1) Held-to-maturity bonds None

(2) Shares of subsidiaries and affiliates ¥408 million

(3) Other securitiesUnlisted stocks ¥519 millionPreferred securities ¥500 million

Derivatives

1. Currency-related

2. Interest-rate-related

3. Other

No details are stated here, as there was a zero balance at the year-end for both the fiscal years ended March 31, 2007 and 2006.



Unrealized gains(losses)

Securities for which balance-sheetamount exceeds acquisition cost

Securities for which balance-sheetamount does not exceed acquisition

cost

Total

Type Acquisition cost Balance-sheet amount

- 31 -

Retirement benefits

1 Outline of the retirement benefit plans adopted 1 Outline of the retirement benefit plans adopted

2 Retirement benefit obligations (¥ million) 2 Retirement benefit obligations (¥ million)(1) Projected benefit obligations 13,883 (1) Projected benefit obligations 13,375

Breakdown: Breakdown:(2) Unrecognized prior service cost －

(2) Unrecognized prior service cost －

(3) Unrecognized actuarial difference 233 (3) Unrecognized actuarial

difference 659

(4) Plan assets 9,379 (4) Plan assets 8,464(5) Accrued retirement benefits 4,269 (5) Accrued retirement benefits 4,251

3 Retirement benefit expenses (¥ million) 3 Retirement benefit expenses (¥ million)(1) Service cost 754 (1) Service cost 734(2) Interest cost 328 (2) Interest cost 320(3) Expected return on plan assets (295) (3) Expected return on plan

assets (252)

(4) Amortization of unrecognized prior service cost －

(4) Amortization of unrecognized prior service cost －

(5) Amortization of actuarial loss 165 (5) Amortization of actuarial loss 241Subtotal 953 Subtotal 1,043

(6) Employees’ pension fund 488 (6) Employees’ pension fund 360Total 1,441 Total 1,403

4 4

(1) Method of attributing projected benefits to periods of service

(1) Method of attributing projected benefits to periods of service

(2) Discount rate 2.5％ (2) Discount rate 2.5％(3) Expected rate of return on plan assets 3.5％ (3) Expected rate of return on

plan assets 3.5％

(4) Amortization period for unrecognized prior service cost

___ years(4) Amortization period for unrecognized prior service cost

___ years

(5) Amortization period for unrecognized actuarial difference

10 years(5) Amortization period for unrecognized actuarial difference

10 years



Assumptions used in the calculation of retirement benefitobligations

(The method used is to charge this proportionately toincome for a fixed number of years within the averageremaining period of service of Company employees atthe time it arises. The amounts are charged to incomefrom the following fiscal year.)

(The method used is to charge this proportionately toincome for a fixed number of years within the averageremaining period of service of Company employees atthe time it arises. The amounts are charged to incomefrom the following fiscal year.)

Tax-qualified pension plan: Since May 1, 1968, theCompany has used a tax-qualified pension plan as part ofits retirement benefit scheme.

Employees’ pension fund: Since April 1, 1980, theCompany has used an employees’ pension fund plan(comprehensive establishment type) as a supplement toits existing retirement benefit scheme. As of March 31,2007, the total pension assets of the said pension fundincluded ¥15,965 million of pension assets computed onthe basis of the total proportion of benefits that the fundaccounts for.Lump-sum grant system: The Company has alsoestablished a retirement lump-sum grant system based onits in-house retirement benefit rules.

Straight-line basisStraight-line basis

Tax-qualified pension plan: Since May 1, 1968, theCompany has used a tax-qualified pension plan as part ofits retirement benefit scheme.

Employees’ pension fund: Since April 1, 1980, theCompany has used an employees’ pension fund plan(comprehensive establishment type) as a supplement toits existing retirement benefit scheme. As of March 31,2006, the total pension assets of the said pension fundincluded ¥15,043 million of pension assets computed onthe basis of the total proportion of benefits that the fundaccounts for.Lump-sum grant system: The Company has alsoestablished a retirement lump-sum grant system based onits in-house retirement benefit rules.

Assumptions used in the calculation of retirement benefitobligations

- 32 -

Per-share data

Net assets per share ¥1,033.61 Net assets per share

Net income per share ¥74.29 Net income per share

¥74.24

Note: The basis for these calculations is as follows

1. Net assets per share

83,620 –

Net assets relating to common stock (Millions of yen) 82,984 – Principal component of the difference (Millions of yen) Minority interests 636 –No. of shares of common stock issued (Thousands) 81,257 –

971 –

80,286 –

2. Net income per share and diluted net income per share

5,961 5,915

5,961 5,825

– 90

– 90

80,236 79,928

– –61 139

61 139

– –

(Including stock options from acquisition of treasury stock)Summary of potential shares not included in calculation ofdiluted net income per share because they are nondilutive.

¥981.92

¥72.89

¥72.76


(April 1, 2006–March 31, 2007)


(April 1, 2005–March 31, 2006)


(At March 31, 2007)

Fiscal year ended March 31, 2006(April 1, 2005–March 31, 2006)

Diluted net income per share Diluted net income per share

Increase in common stock (Thousands)


(At March 31, 2006)Total net assets in consolidated balance sheet(Millions of yen)

No. of shares of common stock held as treasury stock(Thousands)No. of shares of common stock used to compute net assetsper share (Thousands)

Fiscal year ended March 31, 2007(April 1, 2006–March 31, 2007)

Net income in the consolidated statements of income(Millions of yen)

Average no. of shares of common stock outstandingduring the term (Thousands)

Diluted net income per share Net income adjustment (Millions of yen)

Net income relating to common stock (Millions of yen)Principal component of amount not attributable tocommon stock (Millions of yen) Officers' bonuses from distribution of profitAmount not attributable to common stock (Millions of yen)

－ 33 －

Significant Subsequent Events

Purchase of a company by acquisition of shares

1. Reasons for the acquisition

2.

(1) Name: Terry McGann & Associates, Inc(2) Head office address: 651 Taft Street, NE Minneapolis, MN 55413(3) Representative: Terrence G. McGann, President & CEO(4) Established: 29,984(5) Capital: US$10,000 (¥1.19 million) (at December 31, 2006)(6) Sales: US$34.7 million (¥4,134 million) (year to December 2006)(7) Principal business: Development and sale of parking-lot management software

3. Details of the acquisition

(1) No. of shares to be acquired: 10,000 (All shares issued by the acquired company)(2) Acquisition price: To be determined upon completion of due diligence

4. Schedule

Conclusion of basic agreementDue diligence periodConclusion of share purchase agreement and completion of purchase

5. Outlook

May 7, 2007May 2007End-June 2007 (Scheduled)

The two companies are currently at the stage of having reached basic agreement relating to the purchaseand signed an agreement. At present the extent of the impact of the acquisition on the future businessperformance of the Amano Group is not certain.

On May 7, 2007, Amano Corporation, through Amano USA Holdings, Inc., reached a basic agreement with Mr.Terrence G. McGann and four other shareholders to acquire Terry McGann & Associates, Inc. to acquire thatcompany. The company, based in the state of Minnesota in the Midwest of the United States, engages in thedevelopment and sale of software for parking-lot management.

The Amano Group intends to further expand and develop the scope of its parking-lot business in theNorth American market, and in order to achieve that it has because necessary to address the issues ofdeveloping software for parking-lot management and expanding its customer base.

It is Amano's view that by acquiring Terry McGann & Associates, Inc., and consequently being able toacquire its software and first-class customer base intact, the synergies generated from merging the twocompanies' know-how will enable it to provide state-of-the-art solutions in parking-lot managementsystems directly to customers, and through that to make rapid progress in expanding market share in theUnited States.

Overview of the company to be acquired

- 34 -

Headquarters : 275 MAMEDO KOHOKU, YOKOHAMA, JAPAN 222-8558PHONE : +81-45-439-1591 Fax : +81-45-439-1150

AMANO HOMEPAGE

http://www.amano.co.jp/English

summary financial statements (consolidated) for …...72.89 net assets 91,000 13.00 6.1 yen cash...

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