Summary Financial Statements (Consolidated) for …FY 2010 (year ended March 31, 2011) 102,932...

Summary Financial Statements (Consolidated) for the Fiscal Year 2010 (year ended March 31, 2011) (Japan GAAP)

May 9, 2011 Company name: Amano Corporation Listed on: TSE, OSE Securities code: 6436 URL http://www.amano.co.jp/ Representative: Izumi Nakajima, President & Representative Director Inquiries: Toru Ueno, Operating Officer & General Manager, Corporate Planning Unit Phone: +81 (45) 439-1504 Scheduled date of ordinary general meeting of shareholders: June 29, 2011 Scheduled date of filing of securities reports: June 29, 2011 Scheduled date of start of dividend payments: June 30, 2011 Supplementary explanation materials prepared for financial results: Yes Briefing held on financial results: Yes (for institutional investors and analysts) (Amounts less than 1 million yen are rounded down)1. Summary of business results for the FY 2010 (year ended March 31, 2011) (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)

FY 2010 (year ended March 31, 2011) 83,302 6.0 4,383 127.5 4,810 97.4 3,064 203.2

FY 2009 (year ended March 31, 2010) 78,586 (14.4) 1,927 (64.1) 2,436 (54.0) 1,010 (54.3)

Note: Comprehensive income FY2010 (year ended March 31, 2011): 637 million yen (down 64.0% year-on-year) FY2009 (year ended March 31, 2010): 1,772 million yen (n/a)

Net income per share Diluted net income per share

Ratio of net income toequity capital

Ratio of ordinary profit to total assets

Ratio of operating profitto net sales

Yen Yen % % %FY 2010 (year ended March

31, 2011) 40.01 — 4.2 4.7 5.3FY 2009 (year ended March

31, 2010) 13.20 — 1.4 2.4 2.5

Reference: Equity in earnings of affiliates FY2010 (year ended March 31, 2011): 36 million yen FY2009 (year ended March 31, 2010): 57 million yen

(2) Financial position Total assets Net assets Equity ratio Net assets per share

Millions of yen Millions of yen % YenFY 2010 (year ended March

31, 2011) 102,932 72,561 70.3 945.23FY 2009 (year ended March

31, 2010) 100,687 74,967 73.4 964.78

Reference: Equity capital As of March 31, 2011: 72,401 million yen As of March 31, 2010: 73,901 million yen(3) Cash flows

Cash flow from operating activities

Cash flow from investingactivities

Cash flow from financing activities

Cash and cash equivalentsat end of year

Millions of yen Millions of yen Millions of yen Millions of yenFY 2010 (year ended March

31, 2011) 10,284 (5,657) (648) 24,613FY 2009 (year ended March

31, 2010) 9,064 (2,412) (2,382) 20,932

2. Dividends Annual dividends Interim Year-end Year

Total dividend amount(Year)

Payout ratio (Consolidated)

Ratio of dividend tonet assets

(Consolidated) Yen Yen Yen Millions of yen % %

FY 2009 (year ended March 31, 2010) 13.00 13.00 26.00 1,991 197.0 2.7

FY 2010 (year ended March 31, 2011) 13.00 13.00 26.00 1,991 65.0 2.7

FY 2011 (year ending March31, 2012) (Est.) 13.00 13.00 26.00 64.2

3. Forecast earnings for the FY2011 (year ending March 31, 2012) (Percentages represent year-on-year changes)

Net Sales Operating profit Ordinary Profit Net income Net income per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen

First half 42,900 7.4 2,300 87.0 2,500 73.5 1,200 151.0 15.67Full year 88,700 6.5 5,800 32.3 6,200 28.9 3,100 1.2 40.47

4. Other matters

(1) Changes among significant subsidiaries (Changes among specific subsidiaries resulting in a change in the scope of consolidation):

None

Note: For details, please see 2. Status of the Corporate Group on page 11 of the Attachment. (2) Changes in principles and practices, or method of presentation

[1] Changes arising from revision of accounting standards: Yes [2] Other changes: No

Note: For details, please see 4. Consolidated Financial Statements (6) Basis of Presentation of the Consolidated Financial Statements, on page 25, and 4. Consolidated Financial Statements (7) Changes in Basis of Presentation of the Consolidated Financial Statements, on page 27, of the Attachment.

(3) No. of shares issued and outstanding (common stock) [1] No. of shares issued and outstanding at year-

end (including treasury stock) As of March 31, 2011

81,257,829 shares

As of March 31, 2010

81,257,829 shares

[2] No. of shares of treasury stock at year-end As of March 31, 2011

4,660,922 shares

As of March 31, 2010

4,658,707 shares

[3] Average no. of shares outstanding during the year

FY2010 (year ended March 31, 2011)

76,598,144 shares


76,599,843 shares

Reference: Non-consolidated results 1. Summary of business results for the FY2010 (year ended March 31, 2011) (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 %

FY2010 (year ended March 31, 2011) 56,756 7.6 3,628 170.9 4,356 124.5 2,383 170.0

FY2009 (year ended March 31, 2010) 52,768 (17.8) 1,339 (64.1) 1,940 (54.9) 882 (58.6)

Net income per share Diluted net income per share Yen Yen

FY2010 (year ended March 31, 2011) 31.12 —

FY2009 (year ended March 31, 2010) 11.53 —

(2) Financial position Total assets Net assets Equity ratio Net assets per share

Millions of yen Millions of yen % YenFY2010 (year ended March

31, 2011 99,615 79,059 79.4 1,032.16FY2009 (year ended March

31, 2010 96,784 78,706 81.3 1,027.51

Reference: Equity capital As of March 31, 2011: 79,059 million yen As of March 31, 2010: 78,706 million yen2. Forecast earnings for the FY2011 (year ending March 31, 2012) (Percentages represent year-on-year changes)

Net Sales Operating profit Ordinary profit Net income Net income per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen

First half 42,900 4.7 1,700 27.5 1,900 8.2 1,100 10.7 14.36Full year 59,400 4.7 4,400 21.3 4,700 7.9 2,700 13.3 35.25Note: Presentation of the implementation status of audit procedures

These summary financial statements have not been covered by audit procedures based on the Financial Instruments and Exchange Act, and financial statement audit procedures based on the Act will not have been completed by the time this summary report is disclosed.

Note: Explanation concerning appropriate use of the earnings forecast, and other matters to note (Caution regarding forward-looking statements) 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. For the assumptions used to arrive at the earnings forecasts and issues to note regarding use of the earnings forecasts, please see 1. Business Results (1) Analysis of Business Results on page 3 of the Attachment.

(Where to obtain supplementary financial results materials and information provided at the financial results briefing for analysts) Supplementary financial results materials are disclosed via TDnet on the same day as the date of this document. Also, a financial results briefing for institutional investors and analysts is scheduled for Wednesday, May 11, 2011. The financial results materials to be distributed at this briefing are due to be published on the Amano Corporation website immediately following the meeting.

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Table of Contents of Attachment

1. Business Results ................................................................................................................................................... 3 (1) Analysis of Business Results ...................................................................................................................... 3 (2) Analysis of Financial Condition.................................................................................................................. 7 (3) Basic Policy on Distribution of Profits, and Dividend for This and Next Term .......................................... 8 (4) Operating and Other Risk............................................................................................................................ 9

2. Status of the Corporate Group .............................................................................................................................11 3. Business Policies ................................................................................................................................................ 12

(1) Basic Management Policy......................................................................................................................... 12 (2) New Medium-Term Business Plan............................................................................................................ 12 (3) Issues to Be Addressed.............................................................................................................................. 13

4. Consolidated Financial Statements .......................................................................................................................... 16 (1) Consolidated Balance Sheets .................................................................................................................... 16 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ................ 18 (3) Consolidated Statement of Changes in Shareholders’ Equity.................................................................... 21 (4) Consolidated Statements of Cash Flows ................................................................................................... 23 (5) Notes Regarding Premise of a Going Concern.......................................................................................... 25 (6) Basis of Presentation of the Consolidated Financial Statements ............................................................... 25 (7) Changes in Basis of Presentation of the Consolidated Financial Statements ............................................ 27 (8) Notes to the Consolidated Financial Statements ....................................................................................... 28

Consolidated balance sheets...................................................................................................................... 28 Consolidated statements of income........................................................................................................... 28 Consolidated Statements of Comprehensive Income ................................................................................ 28 Consolidated statement of changes in shareholders’ equity ...................................................................... 29 Consolidated Statements of Cash Flows ................................................................................................... 30 Segment Information ................................................................................................................................ 31 Deferred tax accounting............................................................................................................................ 37 Securities .................................................................................................................................................. 38 Retirement benefits ................................................................................................................................... 40 Per-share data............................................................................................................................................ 42 Significant subsequent events ................................................................................................................... 42

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1. Business Results (1) Analysis of Business Results

During the fiscal year ended March 31, 2011, the Japanese economy saw industrial production and corporate earnings rebound and the unemployment rate improve slightly, as exports increased supported by economic growth in Asian and other countries. These and other indicators showed that the economy overcame the business doldrums that prevailed in the latter half of last year and was beginning to recover gradually. Yet, in the aftermath of the Great East Japan Earthquake, current domestic economic activity as a whole now seems to be significantly depressed.

Amid this business environment, the Amano Group worked on global market and product development as well as enhancement of its capacity to provide holistic solutions, in accordance with the consolidated growth strategy in its new medium-term business plan, formulated in April 2008. The entire organization also concentrated on thoroughly uncovering customer needs and strove to reduce cost of sales and selling, general and administrative expenses.

As a result of the above, during the year the Company recorded sales of ¥83,302 million, up by 6.0% year-on-year. Operating profit increased by 127.5% to ¥4,383 million, ordinary profit went up by 97.4% to ¥4,810 million, and net income increased by 203.2% to ¥3,064 million.

The following is an overview of sales by business division.

Sales by business division (Unit: Millions of yen)

FY2009 (year ended

March 31, 2010)

FY2010 (year ended

March 31, 2011) Change

Category

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

Information Systems 17,440 22.2 18,889 22.7 1,449 8.3Time Management Equipment 4,315 5.5 4,406 5.3 91 2.1

Parking Systems 37,786 48.1 38,493 46.2 706 1.9

Subtotal 59,542 75.8 61,789 74.2 2,247 3.8

Environment System Business

Environmental Systems 11,520 14.6 14,144 17.0 2,623 22.8

Clean Systems 7,523 9.6 7,368 8.8 (154) (2.0)

Subtotal 19,043 24.2 21,513 25.8 2,469 13.0

Total 78,586 100.0 83,302 100.0 4,716 6.0

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Time Information System Business • Information Systems: Time & attendance (T&A), payroll, human-resource management,

access control, and cafeteria systems • Time Management Equipment: Time recorders, and time stamps • Parking Systems: Parking and bicycle-parking space management systems, and parking

management services • Information Systems This business division continued to struggle under difficult conditions in Japan including a prolonged reduction in information-related investments and intensifying competition in the market, though there were also signs of recovery in capital investments. On the other hand, fast growing markets for cloud computing services reflect the growing needs of companies wishing to utilize systems as a service without the burden of ownership. In this market environment, the Company continued to provide corporate customers with effective solutions for compliance and cost reduction, including work schedule optimization and total personnel expense control, to accommodate initiatives to improve their work environments. The Company also concentrated on uncovering potential demand by intensifying efforts to make new proposals for cloud computing services. During the year, in Japan hardware sales increased by ¥344 million (6.9%) year-on-year, software sales decreased by ¥259 million (7.2%), and sales generated by maintenance contracts and supplies services increased by ¥170 million (5.7%). Decreased software sales reflected a setback in demand stemming from compliance with the Revised Labor Standards Act, which came into effect in April last year. By product area, T&A system sales were up by ¥527 million (6.3%), while access control system sales increased by ¥71 million (7.0%). Overall overseas sales increased by ¥1,077 million (20.1%) year-on-year. Sales for North America grew as Accu-Time Systems became a newly consolidated subsidiary of Amano Corporation this fiscal year. Sales for Europe continued to be strong, as the sales of Horosmart S.A. increased on a local currency basis. However, sales revenues in terms of Japanese yen showed a decrease due to fluctuations in exchange rates. Sales for Asia decreased slightly. As a net result of the above, overall sales in this business division totaled ¥18,889 million, representing a increase of 8.3% from the previous year. • Time Management Equipment In Japan, this business division continued to struggle under difficult conditions, as the tight employment situation and uncertain future economic prospects kept a lid on demand. In this market environment, the Company concentrated on expanding new markets and attracting a growing base of new customers by enhancing the functionality of PC-interfaced time recorders and stepping up sales promotions. In Japan, sales for the year increased by ¥250 million (7.9%) from a year earlier, as continued strong sales of IC card-type PC-interface time recorders contributed to growth in both revenue and unit sales. Overall overseas sales decreased by ¥69 million (4.6%) year-on-year. Sales for North America and Europe both fell while those for Asia rose. As a result of the above, the time management equipment business division generated sales totaling ¥4,406 million, up by 2.1% from the previous year. • Parking Systems This business division is seeing its operating environment in Japan change significantly. The broader installation of charging stations for electric vehicles and the introduction of car sharing services, for example, have diversified parking lot operation styles. Initiatives have developed to enhance the quality of service offerings, to conserve electricity through the use of LED lighting fixtures, and to operate environment-friendly parking spaces through measures such as the installation of solar panels. In this market environment, the Company stepped up its efforts to provide customers with solutions aimed at increasing the profitability and efficiency, and reducing the labor intensiveness, of parking lot operations from a customer perspective, as well as with holistic solutions for the operation and management of parking lot services. These efforts were focused on uncovering new demand for replacement projects and on growing new markets including for bicycle parking systems and exclusive gate systems.

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In Japan, sales of car and bicycle parking system devices during the year increased by ¥1,506 million yen (11.9%) from a year earlier, due to an increased number of small and medium-sized system renewal projects. Revenues from maintenance contracts and supplies services increased by ¥93 million (1.1%). The number of parking spaces managed by Group subsidiary Amano Management Service Corporation in its commissioned parking lot management business increased by 13,600 (7.4%) from the end of the previous fiscal year. Overall overseas sales decreased by ¥1,182 million (10.6%) year-on-year. Sales for North America declined substantially, suffering from stagnating demand as the economic climate deteriorated. Those for Europe grew due to greater efforts in selling low-priced parking systems, while Asian operations saw sales grow due to the continued strength of the Korean market. As a net result of the above, the Parking Systems business division provided sales totaling ¥38,493 million, an increase of 1.9% 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, and electrolytic water generators

• Clean Systems: Cleaning equipment, dry-care cleaning systems, and cleaning management services

• Environmental Systems This division benefited from continued recovery in the business environment in Japan. Although manufacturers accelerated their shift to overseas countries, driven by recovery in capital investment and by strong orders for machine tools for emerging markets, particularly China and other Asian countries, demand overseas, particularly for standard dust collectors, improved. In this market environment, the Company shifted its managerial resources to markets where demand is growing, concentrating on the Asian market. The Company’s efforts included the bolstering of systems to sell products and services to businesses operating overseas, the establishment of closer cooperation with overseas group companies, and the expansion of production in China. These efforts were focused on stimulating further growth in demand. During the year, in Japan sales of standard equipment and large-scale systems increased by ¥1,359 million (37.9%) and ¥140 million (3.5%) year-on-year, respectively, while revenue from maintenance contracts and supplies services increased by ¥449 million (15.9%). Overall overseas sales increased by ¥733 million (106.8%) year-on-year, due to continuing strong orders reflecting recovery in capital investments by Japanese-affiliated companies in Asian markets. As a result of the above, sales of this business division totaled ¥14,144 million, up by 22.8% year-on-year. • Clean Systems This business division continued to struggle under difficult conditions in Japan. It suffered from a reduction in new shopping centers opened, reduced total cleaning costs, and other factors, although it benefited from increased demand in the factory market reflecting recovery in capital investment by manufacturers. In this market environment, the Company focused on uncovering new demand by stepping up its efforts to promote solutions for total cost reductions using new floor treatment systems and maintenance services. In Japan, sales of cleaning equipment during the year increased by ¥22 million (1.1%) year-on-year, due to improved demand for floor cleaning machines for factory facilities. Revenue from maintenance contracts and supplies services decreased by ¥77 million (2.6%). Overall overseas sales decreased by ¥67 million (4.0%) year-on-year. Sales for North America grew in terms of local currencies but, decreased in yen due to fluctuations in exchange rates, and sales for Europe and Asia continued to remain sluggish. As a result of the above, sales in this segment totaled ¥7,368 million, down by 2.0% from the previous year.

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(Reference information)

Information by area (Unit: Millions of yen)

Net sales Operating profit (loss) FY2009 (year

ended March 31, 2010)

FY2010 (year ended March 31,

2011) Change Percentage

change (%)FY2009 (year

ended March 31, 2010)

FY2010 (year ended March 31,

2011) Change Percentage

change (%)

Japan 59,447 64,036 4,588 7.7 4,465 6,868 2,402 53.8

Other Asia 4,219 5,570 1,351 32.0 308 591 283 91.8

North America 10,679 10,184 (495) (4.6) (57) (107) (49) ―

Europe 5,709 5,396 (313) (5.5) (328) (195) 132 ―

Total 80,055 85,187 5,131 6.4 4,387 7,156 2,769 63.1

Eliminations/ Corporate (1,469) (1,885) ― ― (2,460) (2,773) ― ―

Consolidated 78,586 83,302 4,716 6.0 1,927 4,383 2,456 127.5

Notes 1. The national and regional demarcations are in accordance with the degree of geographical proximity. 2. Major countries and territories included in areas other than Japan:

(1) Other Asia: Singapore, Thailand, Malaysia, Indonesia, South Korea, China (2) North America: United States, Canada (3) Europe: France, Belgium, Spain

Overseas sales

(Unit: Millions of yen)

Overseas sales Proportion of consolidated net sales accounted for by overseas sales (%)

FY2009 (year ended March

31, 2010)


31, 2011) Change Percentage

change (%)


31, 2010)


31, 2011) Change

Other Asia 4,353 5,728 1,374 31.6 5.6 6.9 1.3

North America 10,526 10,041 (485) (4.6) 13.4 12.1 (1.3)

Europe 5,678 5,364 (314) (5.5) 7.2 6.4 (0.8)

Other regions 171 146 (24) (14.5) 0.2 0.2 (0.0)

Total 20,730 21,280 549 2.7 26.4 25.5 (0.8)

Consolidated net sales 78,586 83,302

Notes 1. The national and regional demarcations are in accordance with the degree of geographical proximity. 2. Major countries and territories included in areas other than Japan:

(1) Other Asia: Singapore, Thailand, Malaysia, Indonesia, South Korea, China (2) North America: United States, Canada (3) Europe: France, Belgium, Spain (4) Other regions: Central and South America

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

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(2) Analysis of Financial Condition

(i) Assets, Liabilities, and Net Assets (Assets) Total assets at March 31, 2011, amounted to ¥102,932 million, up by ¥2,245 million from the previous fiscal year-end. Current assets increased by ¥4,054 million year-on-year. This was chiefly due to a ¥3,589 million increase in cash and bank deposits. Fixed assets decreased by ¥1,808 million year-on-year. This was attributable primarily to a reduction of ¥2,112 million in intangible fixed assets. (Liabilities) Total liabilities at the fiscal year-end amounted to ¥30,371 million, up by ¥4,652 million year-on-year. Current liabilities increased ¥4,777 million year-on-year. This was chiefly due to an increase of ¥1,695 million in short-term bank loans, an increase of ¥1,370 million in accrued income taxes, and an increase of ¥1,021 million in trade notes and accounts payable. Fixed liabilities decreased by ¥125 million year-on-year. The principal factors behind this were a decrease of ¥428 million in accrued retirement benefits for employees and a decrease of ¥268 million in other long-term accounts payable, despite an increase of ¥518 million in lease obligations. (Net Assets) Total net assets at March 31, 2011 amounted to ¥72,561 million, down by ¥2,406 million from the previous fiscal year-end. This was primarily due to a decrease of ¥2,570 million in total accumulated other comprehensive income resulting from a decrease in foreign currency translation adjustments.

(ii) Cash Flows

Consolidated cash and cash equivalents increased by ¥3,680 million from the previous fiscal year-end, to a total of ¥24,613 million on March 31, 2011. More specifically, a description of the status of each type of cash flow at the year-end and the underlying factors are as follows.

Cash flow from operating activities Net cash provided by operating activities totaled ¥10,284 million. This was attributable primarily to income before income taxes, which amounted to ¥5,463 million, and depreciation and amortization, which amounted to ¥4,351 million, despite income taxes payments, which amounted to ¥1,083 million.

Cash flow from investing activities Net cash used in investing activities totaled −¥5,657 million. This was largely due to expenditures of ¥5,568 million for the placement of time deposits, ¥2,000 million for the acquisition of securities, ¥1,560 million for the acquisition of subsidiaries’ shares resulting in a change in the scope of consolidation, ¥1,445 million for the acquisition of intangible fixed assets, and ¥804 million for the purchase of tangible fixed assets. These outflows more than offset proceeds of ¥4,379 million from the withdrawal of time deposits and ¥2,000 million from the redemption of securities.

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Cash flow from financing activities Net cash used in financing activities totaled −¥648 million. This was chiefly due to expenditures of ¥1,991 million for the payment of cash dividends by the parent company and ¥522 million for the repayment of finance lease obligations, despite proceeds of ¥1,905 million from the borrowing of short-term bank loans.

Reference: Trend of cash flow indicators

As of Mar. 31, 2007

As of Mar. 31, 2008

As of Mar. 31, 2009

As of Mar. 31, 2010

As of Mar. 31, 2011

Equity ratio (%) 74.4 73.0 72.9 73.4 70.3

Fair value equity ratio (%) 103.6 70.6 58.8 64.7 59.3

Ratio of cash flow to interest-bearing liabilities (%) 36.2 17.5 24.1 17.1 31.4

Interest coverage ratio 125.3 166.6 200.7 250.6 275.2

Notes: Equity ratio: Equity capital/Total assets Fair value equity ratio: Gross market capitalization/Total assets Ratio of cash flow to interest-bearing liabilities: Interest-bearing liabilities/Cash flow from operating activities Interest coverage ratio: Cash flow from operating activities/Interest payments

Assumptions * All indicators are calculated on the basis of consolidated financial values. * Gross market capitalization is calculated by multiplying the closing price of the Company’s shares at the year-end by the

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

(iii) Outlook for the Fiscal Year Ending March 31, 2012

The Japanese economy, which has been depressed significantly in the aftermath of the Great East Japan Earthquake, is likely to see a gradual rebound in economic activity during the next fiscal year. Still, the effects of reduced industrial production and other factors may put a temporary dent in corporate earnings and in employment and personal income conditions. Despite persistent high growth in China and other emerging countries, given the continuing commodity price rises in reaction to the unsettled situation in the Middle East and other circumstances, the Japanese economy’s future prospects seem to becoming increasingly uncertain. Amid this business environment, Amano Corporation and its group companies continue to emphasize the following strategies: 1) Emphasis on Time & Ecology business fields, and enhancement of core business; 2) Being a niche leader in the business fields in which we excel; 3) Ceaseless restructuring; and 4) Management based on cash flow. In line with these four fundamental strategies, we will pursue our consolidated growth strategy on a global scale to ensure sustainable growth and continually improving profitability with a view to maximizing the corporate value of Amano Corporation. The following business results are projected for the fiscal year ending March 31, 2012: Net sales ¥88,700 million, operating profit ¥5,800 million, ordinary profit ¥6,200 million, and net income ¥3,100 million. The above projections assume currency exchange rates of US$1 to ¥82 and €1 to ¥115.

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

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annual per-share dividend will be ¥26 (including the ¥13 per share paid as the interim dividend). This corresponds to a dividend payout ratio of 65.0% and a 2.7% ratio of dividends to net assets on a consolidated basis. With regard to the dividend for the next fiscal year, in line with our Basic Policy on Distribution of Profits and in view of our Outlook for the Fiscal Ending March 31, 2012, we will aim to pay a dividend for the year of ¥26 (interim dividend of ¥13, and year-end dividend of ¥13). Retained earnings will be earmarked for 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.

(4) Operating and Other Risk Factors

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 9, 2011).

(i) Impact on earnings due to changes in the business 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, 2011, the time information system business accounted for 74.2% of total sales, and the environment system business accounted for 25.8%. Before deduction of unallocated expenses the time information system business contributed 79.5% to operating profit, while the environment system business contributed 20.5%. In terms of weighted average sales over the most recent five years, time information system business accounted for 70.3% of total sales and for 71.9% 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 converted into yen.

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(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 physical 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.

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2. Status of the Corporate Group The Amano Group comprises Amano Corporation and 29 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.

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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 toward maximizing corporate value by fostering innovation in management and by ensuring a strong earnings structure and sustained growth in business performance.

(2) New Medium-Term Business Plan

Amano and 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) Ceaseless restructuring 4) Management based on cash flow

Based on these four fundamental strategies, Amano inaugurated a new medium-term business plan. An outline of the plan is set out below.

[1] Basic Policies

Under the new medium-term business plan, the Group seeks to be a global niche leader by exploring new market frontiers (advancing aggressively into emerging and untapped markets), developing multi-disciplinary business operations on a location-by-location basis, and establishing new businesses domains. We are pursuing a new global growth strategy designed to achieve the maximization of corporate value. Priority issues under the new plan are listed below.

1. North American and European markets North America: In the parking system business, we will merge Amano McGann’s parking management software with Amano Group’s software and hardware, introduce new parking systems into the market, and strengthen direct sales structures to work closely with customers when proposing solutions. These efforts are designed to build upon our business foundations that are second to none in North America. In our time information system business, we will continue to scale up our operations by adding new products alongside a wide array of time information management terminals and a blue-chip customer base that Accu-Time Systems enjoys. By commencing the local production and distribution of mist collectors through Amano Pioneer Eclipse, we will take a new step toward fortifying and expanding our operations in the environment system business. Europe: In the time information system business, we will continue to enhance Horosmart’s ability to offer holistic solutions, and to expand its blue-chip customer base. These efforts are aimed at cementing our number one position at the high end of the market in France and at increasing our visibility and expanding further into other markets across Europe. In the parking system business, we will step up sales of low-priced system products, focusing on the UK and the three Benelux countries, in order to build a stronger operations foundation.

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2. Asian, Latin American and other emerging markets Asia: In the environment system business, we will enhance our capabilities to offer products and render services to Japanese companies operating in Asia outside Japan by deepening ties between our group companies across Asia and our head office in Japan. We will also expand our local production capabilities in order to enhance our cost competitiveness. In the parking system business, we will seek to further scale up our South Korean and Malaysian operations as well as to aggressively promote the development of business operations in China, Singapore, and other Asian countries. Latin America: In anticipation of the local market’s future growth potential, we will aggressively allocate a higher proportion of our managerial resources there, including those toward the commencement of local production, in order to explore market frontiers in each of the information system, parking system, and environment system businesses.

3. Japanese market

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

[2] Numerical Targets

Under the new business plan, we aim to achieve ¥100 billion or more in net sales and ¥10 billion or more in operating profit in the final year of the plan, which ends March 31, 2014.

Numerical targets

(Millions of yen)

FY2011 (year ending March 31, 2012)



Amount Year-on-year change Amount Year-on-year

change Amount Year-on-year change

Net sales 88,700 6.5% 95,300 7.4% 103,000 8.1%Operating profit 5,800 32.3% 7,700 32.8% 10,000 29.9%Operating profit ratio 6.5% — 8.1% — 9.7% —Ordinary profit 6,200 28.9% 8,000 29.0% 10,300 28.8%

Net income 3,100 1.2% 4,200 35.5% 5,700 35.7%

(3) Issues to Be Addressed

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

1) Time information systems • Information systems business Amid continuing efforts by the labor authorities to more strictly monitor unpaid overtime and long working hours (overworking) in order to eradicate these practices as well as an increasing need to deal with risks surrounding employment, such as industrial court cases resulting from deteriorating employment conditions, there is strong potential demand among companies to establish or rebuild T&A systems. The aim is to create a company-wide labor time management system to optimize business operations by reducing working hours, improving work efficiency, cutting costs, etc. In addition, we will aim to strengthen measures for compliance toward appropriately managing working hours. However, market conditions remain tough reflecting prolonged reductions in information related investments, intensifying competition in the market, and other factors. Meanwhile, the environment surrounding the business in this segment has been facing a significant shift from a period of owning systems to a period of utilizing them, with an increasingly prominent movement in the industry

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toward cloud computing. In this market environment, we will focus on spurring latent demand in our solutions business targeted at large companies by strengthening our competitive advantage with enhanced software functions, and reinforcing our marketing structures with collaboration between sales staff and systems engineers. In addition, we will aim to expand our Application Service Provider (ASP) services business by reinforcing alliances with Group companies in Japan in order to respond to the changes of the times. To enhance the profitability of this business, we will strictly manage revenue from our solutions business targeted at large companies, enhance our project management systems, cut costs by standardizing system software, and expand sales of standard software packages to small and medium-scale business establishments, so as to boost earnings capacity. Overseas, we aim to strengthen our customer base and expand distribution channels in North America, leveraging the strengths of Accu-Time Systems, Inc. which we acquired in February 2010 in the U.S. In addition, we will work on establishing a global supply system and reducing development costs by expanding our hardware lineup. As a means of expanding our business, we will also extend sales channels for software products of Horosmart, S.A. (France) across Europe and reinforce our organizational structures toward globalization.

• Parking systems business The parking system business is seeing its surrounding operating conditions change significantly. For example, the broader installation of charging stations for electric vehicles, programs to reduce greenhouse gas emissions, and the introduction of car sharing services designed to ease traffic congestion have led to a diversification of parking lot operation styles. Meanwhile, initiatives have developed to enhance the quality of customer service offerings, to conserve electricity through the use of LED lighting, and to operate environment-friendly parking spaces through measures such as the installation of solar panels. In this environment we will focus on making proposals from the customer’s perspective with an emphasis on areas such as higher profitability and efficiency of parking space management. We will steadily meet the needs of existing customers by offering high value-added products with network capabilities and inbuilt IT functions and forging ahead with the holistic solutions business, including maintenance and parking lot management services in close collaboration with Group companies. In the market for bicycle parking that has arisen as a result of the problem of abandoned bicycles, we will seek to revitalize and expand the market by proactively making proposals on ecology-oriented initiatives including rent-a-cycles and community bicycle systems. In the market for exclusive gate systems controlling entry and exit to and from sites such as factories, we aim to expand the new market with the emphasis on safety and security in addition to making proposals on labor-savings and rationalization. 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. With an establishment of Amano UK Ltd. in England, we aim to capture demand for replacement from existing customers and cultivate the new market in Europe by leveraging direct distribution networks. In addition, we will strive to further expand our business in Asia with the main focus on South Korea.

2) Environment systems business • Environment systems The environment system business sees continued recovery in its surrounding operating conditions in Japan. While Japanese manufacturers continue to accelerate their shift to overseas countries, driven by recovery in capital investment and by strong orders for machine tools for emerging markets, particularly China and other Asian countries, demand overseas, particularly for standard dust collectors, has picked up.

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In this market environment, we will continue to shift our managerial resources to markets where demand is growing in order to accurately exploit expansions in demand, particularly in the Asian market. Our efforts include the bolstering of systems to sell products and services to businesses operating overseas, the establishment of closer cooperation with overseas group companies, and the expansion of production in China. In addition, we will strengthen our capability 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 China, Thailand, and other Asian countries. In North America, we will embark on the local production and distribution of dust collectors as a new step toward completing our operations foundation.

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.

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4. Consolidated Financial Statements (1) Consolidated Balance Sheets

(Millions of yen)

FY2009 (As of March 31, 2010)

FY2010 (As of March 31, 2011)

Assets Current assets Cash and bank deposits 23,675 27,264 Notes and accounts receivable—trade 21,134 21,145 Marketable securities 1,226 1,189 Merchandise and finished goods 2,883 2,943 Work in process 685 722 Raw materials and supplies 2,448 2,661 Deferred tax assets 1,105 1,320 Other current assets 1,790 1,671 Allowance for doubtful accounts (214) (129) Total current assets 54,735 58,789 Fixed assets Tangible fixed assets Buildings and structures (net) 11,921 11,324 Machinery and vehicles (net) 1,300 967 Tools, furniture and fixtures (net) 1,105 881 Land 7,161 7,155 Lease assets (net) 1,384 1,831 Construction in progress 83 297 Total tangible fixed assets 22,956 22,456 Intangible fixed assets Goodwill 6,776 5,455 Software 4,174 2,849 Software in progress 278 336 Other 671 1,147 Total intangible fixed assets 11,901 9,788 Investments and other assets Investment securities 4,514 4,817 Long-term loans receivable 19 13 Claims in bankruptcy and similar claims 530 484 Fixed leasehold deposits 1,093 1,081 Deferred tax assets 2,333 2,069 Long-term deposits 533 1,700 Other 2,542 2,158 Allowance for doubtful accounts (473) (427) Total investments and other assets 11,093 11,897 Total fixed assets 45,951 44,143 Total assets 100,687 102,932

17

(Millions of yen)

FY2009 (As of March 31, 2010)

FY2010 (As of March 31, 2011)

Liabilities Current liabilities Notes and accounts payable—trade 9,008 10,030 Short-term bank loans 19 1,715 Lease obligations 476 539 Accrued income taxes 679 2,049 Accrued bonuses 1,639 1,768 Accrued officers’ bonuses 8 – Allowance for loss on disaster – 15 Other current liabilities 7,592 8,081 Total current liabilities 19,423 24,200 Long-term liabilities Long-term bank loans 25 10 Long-term accounts payable—other 541 272 Lease obligations 1,231 1,749 Deferred tax liabilities 362 300 Accrued retirement benefits for employees 3,883 3,454 Asset retirement obligations – 16 Other long-term liabilities 252 366 Total long-term liabilities 6,296 6,170 Total liabilities 25,719 30,371

Net assets Shareholders’ equity Common stock 18,239 18,239 Capital surplus 19,567 19,567 Retained earnings 45,895 46,968 Treasury stock (3,717) (3,718) Total shareholders’ equity 79,985 81,056 Accumulated other comprehensive income Net unrealized gains (losses) on available-

for-sale securities (117) (154)

Foreign currency translation adjustments (5,966) (8,500) Total accumulated other comprehensive income (6,083) (8,654) Minority interests 1,066 159 Total net assets 74,967 72,561

Total liabilities and net assets 100,687 102,932

18

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Consolidated Statements of Income

(Millions of yen)



Net sales 78,586 83,302Cost of sales 44,654 46,691Gross profit 33,931 36,610

Selling, general and administrative expenses Selling expenses 29,013 29,145 General and administrative expenses 2,991 3,081 Total SG&A expenses 32,004 32,227

Operating profit 1,927 4,383

Non-operating profit Interest income 73 63 Dividend income 68 75 Foreign exchange gain 53 – Gain on allotment of investment securities – 123 Other 461 449 Total non-operating profit 657 712

Non-operating expenses Interest expenses 30 37 Foreign exchange loss – 170 Other 117 77 Total non-operating expenses 148 285

Ordinary profit 2,436 4,810

Extraordinary income Gain on sale of fixed assets 4 8 Gain on sale of investment securities 0 – Reversal of allowance for doubtful accounts 13 65 Gain on negative goodwill – 990 Other – 16 Total extraordinary income 17 1,081

Extraordinary losses Loss on disposal of fixed assets 24 59 Loss on sale of fixed assets 7 3 Valuation loss on investment securities 56 125 Loss on sale of investment securities – 0 Loss on transfer of business – 129 Loss resulting from disaster – 24 Other 0 86 Total extraordinary losses 88 427

Income before income taxes 2,365 5,463

Current income taxes 938 2,273Income taxes–deferred 249 (31)

19

(Millions of yen)



Total income taxes 1,187 2,242

Net profit before minority interests – 3,221Minority interests 167 156Net income 1,010 3,064

20

Consolidated Statements of Comprehensive Income (Millions of yen)



Net profit before minority interests – 3,221Other comprehensive income

Net unrealized gains (losses) on available-for-sale securities

– (36)

Foreign currency translation adjustments – (2,539) Share of other comprehensive income of affiliates

accounted for using the equity method – (7)

Total other comprehensive income – (2,583)

Comprehensive income 637

Comprehensive income attributable to: Comprehensive income attributable to owners of the

parent – 493

Comprehensive income attributable to minority interests

– 144

21

(3) Consolidated Statement of Changes in Shareholders’ Equity (Millions of yen)



Assets Common stock Balance at previous year end 18,239 18,239 Changes during the year Total changes during the year – – Balance at year end 18,239 18,239 Capital surplus Balance at previous year end 19,567 19,567 Changes during the year Total changes during the year – – Balance at year end 19,567 19,567 Retained earnings Balance at previous year end 47,044 45,895 Changes during the year Dividends from surplus (1,991) (1,991) Net income 1,010 3,064 Change in the scope of consolidation (168) – Total changes during the year (1,149) 1,072 Balance at year end 45,895 46,968 Treasury stock Balance at previous year end (3,715) (3,717) Changes during the year Purchase of treasury stock (1) (1) Total changes during the year (1) (1) Balance at year end (3,717) (3,718) Total shareholders’ equity Balance at previous year end 81,136 79,985 Changes during the year Dividends from surplus (1,991) (1,991) Net income 1,010 3,064 Purchase of treasury stock (1) (1) Change in the scope of consolidation (168) – Total changes during the year (1,151) 1,071 Balance at year end 79,985 81,056

22

(Millions of yen)



Accumulated other comprehensive income Net unrealized gains (losses) on available-for-sale

securities Balance at previous year end (303) (117) Changes during the year Net changes in items other than shareholders’

equity 185 (36)

Total changes during the year 185 (36) Balance at year end (117) (154) Foreign currency translation adjustments Balance at previous year end (6,370) (5,966) Changes during the year Net changes in items other than shareholders’

equity 403 (2,534)

Balance at year end 403 (2,534) Total changes during the year (5,966) (8,500) Total accumulated other comprehensive income Balance at previous year end (6,673) (6,083) Changes during the year Net changes in items other than shareholders’

equity 589 (2,570)

Total changes during the year 589 (2,570) Balance at year end (6,083) (8,654)

Minority interests Balance at previous year end 932 1,066 Changes during the year Net changes in items other than shareholders’

equity 134 (906)

Total changes during the year 134 (906) Balance at year end 1,066 159

Total net assets Balance at previous year end 75,394 74,967 Changes during the year Dividends from surplus (1,991) (1,991) Net income 1,010 3,064 Purchase of treasury stock (1) (1) Change in the scope of consolidation (168) – Net changes in items other than shareholders’

equity 724 (3,477)

Total changes during the year (427) (2,406) Balance at year end 74,967 72,561

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



Cash Flows from Operating Activities Income before income taxes 2,365 5,463 Depreciation and amortization 4,676 4,351 Amortization of goodwill 667 718 Increase (decrease) in accrued retirement benefits

for employees (328) (410)

Increase (decrease) in allowance for doubtful accounts

27 (45)

Interest and dividend revenue (142) (138) Equity in (earnings) losses of affiliates (57) (36) Interest expenses 30 37 Foreign currency translation loss (gain) (2) (43) Loss (gain) on sale of fixed assets 3 (5) Loss on disposal of fixed assets 24 59 Loss (gain) on sale of investment securities (0) 0 Loss (gain) on valuation of investment securities 56 125 Loss (gain) on transfer of business – 129 Gain on negative goodwill – (990) (Increase) decrease in trade notes and accounts

receivable 2,661 (585)

(Increase) decrease in inventories 533 (453) Increase (decrease) in accounts payable (0) 1,150 Increase (decrease) in other current liabilities – 879 Other (506) 548 Subtotal 10,009 10,754 Receipts from interest and dividends 207 205 Interest paid (36) (37) Extra retirement payment (30) – Income taxes paid (1,302) (1,083) Income taxes refunded 217 445 Net cash provided by operating activities 9,064 10,284

Cash Flows from Investing Activities Payment for acquisition of securities (2,028) (2,000) Proceeds from redemption of securities 2,000 2,000 Payment for purchase of tangible fixed assets (1,657) (804) Proceeds from sale of tangible fixed assets 5 18 Payment for acquisition of intangible fixed assets (1,639) (1,445) Payment for acquisition of investment securities (806) (636) Proceeds from sale of investment securities 51 – Proceeds from redemption of investment securities 700 – Expenditure for acquisition of subsidiaries’ shares – (59) Expenditure for acquisition of subsidiaries’ shares

resulting in a change in the scope of consolidation – (1,560)

Payment for business transfers – 50

24

(Millions of yen)



Repayment for loans to third parties (1) (18) Collection of loans receivable 5 22 Increase in time deposits (4,624) (5,568) Proceeds from withdrawal of time deposits 5,206 4,379 Other 377 (35) Net cash used in investing activities (2,412) (5,657)

Cash Flows from Financing Activities Proceeds from short-term bank loans – 1,905 Repayment for short-term bank loans (0) (6) Proceeds from long-term debt 33 – Repayment for long-term debt (51) (10) Payment for acquisition of treasury stock (1) (1) Repayment of finance/lease obligations (333) (522) Dividends paid (1,991) (1,991) Dividends paid to minority interests (37) (21) Net cash used in financing activities (2,382) (648)

Effect of exchange rate changes on cash and cash equivalents

(156) (418)

Net increase (decrease) in cash and cash equivalents 4,113 3,559Cash and cash equivalents at beginning of year 16,708 20,932Net increase in cash and cash equivalents from newly consolidated subsidiaries

110 –

Net increase (decrease) in cash and cash equivalents due to merger of consolidated and nonconsolidated subsidiaries

– 121

Cash and cash equivalents at end of period 20,932 24,613

25

(5) Notes Regarding Premise of a Going Concern None

(6) Basis of Presentation of the Consolidated Financial Statements 1. Scope of consolidation

(1) Number of consolidated subsidiaries: 29 Names of major consolidated subsidiaries:

These are set out in section 2: “Status of the Corporate Group” on page 11. Accu-Time Systems, Inc. and Accu-Tech Systems, Ltd. have been included in the scope of consolidation from this fiscal year as a result of their increased significance in terms of consolidated accounting. AMANO INTEGRATED SYSTEMS, INC. has been excluded from the scope of consolidation from this fiscal year as a result of its liquidation. The company’s income for the period up to the liquidation has been consolidated.

(2) Names of non-consolidated subsidiaries:

6 companies: AMANO SOFTWARE ENGINEERING (SHANGHAI) CO., LTD., @PARK KOREA CO., LTD., TIME STAMP SOLUTIONS CO., LTD., AMANO PARKING EUROPE, N.V., AMANO UK Ltd., SHANGHAI QI-AN MACHINERY EQUIPMENT CO., LTD

(Reasons for exclusion from the scope of consolidation) Non-consolidated subsidiaries are all small in scale, and their combined total assets, sales, net income, and retained earnings (according to the Group’s holding in them) in every case would have no material impact on the consolidated financial statements.

2. Application of the equity method Affiliated company to which the equity method is applied: PARKINSYS TECHNOLOGY CO., LTD.

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

4. Accounting standards (1) Valuation standards and methods for significant assets

(a) Securities:

Held-to-maturity bonds: Amortized cost method applied Other securities:

Available-for-sale securities with market prices are marked to market as of the balance sheet date. Net unrealized gains or losses on these securities are recorded directly in shareholders’ equity, and costs of securities sold are computed using the moving average method.

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

(b) Derivatives: Marked to market

(c) Inventories:

Principally stated at cost based on the periodic average method (Balance sheet value calculated by write-down method based on reduced profitability)

(2) Depreciation methods for important depreciable assets (a) Tangible fixed assets (excluding lease 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 life of key items is deemed to be:

Buildings and other structures 7–50 years Machinery, equipment, and vehicles 7–17 years

26

(b) Intangible fixed assets (excluding lease assets)

Straight-line method Software for sale by the Company is depreciated by the straight-line method based on the estimated period during which it can be sold (3 years), while software for internal use by the Company and its domestic consolidated subsidiaries is depreciated by the straight-line method over its useful life (5 years).

(c) Lease assets Lease assets in finance lease transactions not involving transfer of ownership: Depreciation is calculated by the straight-line method over the lease term of the leased assets with no residual value.

(3) Accounting for significant reserves (a) Allowance for doubtful accounts

To provide against possible losses from doubtful accounts such as receivables and loan allowances for general receivables are provided using a rate determined by past loss experience, and allowances for certain doubtful accounts are provided for the estimated amounts considered to be uncollectible after individually studying the collectability of the accounts.

(b) Accrued bonuses To provide for payment of employee bonuses, the amount of bonuses estimated to be paid in the year is stated as accrued bonuses.

(c) Accrued officers’ bonuses To provide for payment of officers’ bonuses, the amount of bonuses estimated to be paid in the year is stated as accrued bonuses. For this fiscal year, because the Company has decided to forgo the payment of officers’ bonuses in view of its operating results and other factors, no accrued officers’ bonuses are recognized.

(d) Accrued retirement benefits for employees To provide for payment of employee retirement benefits, the Company has set aside a reserve based on estimated retirement benefit liabilities and pension assets at the end of the fiscal year. Prior service cost is charged using the straight-line method over a fixed number of years (10) within the average remaining period of service of company employees at the time they arise in each 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 of service of Company employees at the time they arise in each fiscal year.

(e) Allowance for loss resulting from disaster To provide for payments required for the restoration of assets damaged due to the Great East Japan Earthquake, the amount estimated to be incurred at the end of the fiscal year is recognized.

(4) Accounting for significant income and expenses For the purpose of accounting for revenue from completed construction work, the percentage-of-completion method is applied to construction contracts where the percentage of construction already completed by the end of the reporting period can be estimated fairly reliably. (The estimation is based on the proportion of direct costs incurred for each work phase as compared with the estimated total cost for the entire contract.) Other than the above-mentioned construction contracts, the completed-contract method has been applied.

(5) Home currency conversion of significant foreign-currency assets and liabilities Monetary debts and credits denominated in foreign currencies are converted into yen at the spot exchange rate on the final day of the consolidated accounting period, and any differences are treated as either gains or losses. The assets and liabilities of overseas subsidiaries, etc. are converted into yen at the spot exchange rate on the final day of their accounting periods while the income and expenses are calculated on an average exchange rate basis during the period. Any differences are included in net assets as foreign currency translation adjustments and minority interests.

27

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

5. Scope of funds included in the consolidated statements of cash flows Funds include cash on hand, demand deposits, and short-term investments maturing or redeemable within three months after acquisition that are highly liquid, readily convertible into cash, and exposed to low price fluctuation risk.

(7) Changes in Basis of Presentation of the Consolidated Financial Statements Changes in Accounting Policy

1) Application of the “Accounting Standards for the Equity Method” and the “Current Handling of Accounting of Affiliated Companies to which the Equity Method is Applied” Since this fiscal year, the Company has applied the “Accounting Standards for the Equity Method” (ASBJ Statement No. 16, announced on March 10, 2008) and the “Current Handling of Accounting of Affiliated Companies to which the Equity Method is Applied” (Practical Response Report No. 24, March 10, 2008). Application of these standards and methods does not affect the profit and loss of the Company.

2) Application of the “Accounting Standards for Decommissioning Liabilities” and other guidelines Since this fiscal year, the Company has applied the “Accounting Standards for Decommissioning Liabilities” (ASBJ Statement No. 18, March 31, 2008) and the “Guidelines for the Application of the Accounting Standards for Decommissioning Liabilities” (ASBJ Guidance No. 21, March 31, 2008). Application of these standards does not significantly affect the profit and loss of the Company.

3) Application of the “Accounting Standards for Corporate Combination” and other guidelines Since this fiscal year, the Company has applied the “Accounting Standards for Corporate Combination” (ASBJ Statement No. 21, December 26, 2008), the “Accounting Standards for Consolidated Financial Statements” (ASBJ Statement No. 22, December 26, 2008), the “Partial Revision of the ‘Accounting Standards for Research and Development Costs, etc.’” (ASBJ Statement No. 23, December 26, 2008), the “Accounting Standards for Business Separation, etc.” (ASBJ Statement No. 7, December 26, 2008), the “Accounting Standards for the Equity Method” (ASBJ Statement No. 16, December 26, 2008), and the “Guidelines for the Application of Accounting Standards for Corporate Combination and Accounting Standards for Business Separation, etc.” (ASBJ Guidance No. 10, December 26, 2008). The change of the valuation method for the assets and liabilities of consolidated subsidiaries from the partial market price valuation method to the total market price valuation method does not affect the consolidated financial statements of the Company.

Changes in methods of presentation Pursuant to the “Accounting Standards for Consolidated Financial Statements” (ASBJ Statement No. 22, December 26, 2008), since this fiscal year, the Company has applied the “Cabinet Order for Partial Revision of Regulations, Etc., Concerning the Terminology, Formats and Methods of Preparation of Financial Statements, Etc.” (Cabinet Order No. 5, March 24, 2009) with regard to the presentation of the item “net profit before minority interests.”

Additional information Since this fiscal year, the Company has applied the “Accounting Standards for Presentation of Comprehensive Income” (ASBJ Statement No. 25, June 30, 2010). It should be noted that the amounts indicated as “accumulated other comprehensive income” and “total accumulated other comprehensive income” for the previous fiscal year correspond to the amounts reported as “valuation and translation adjustments” and “total valuation and translation adjustments” in the previous year.

28

(8) Notes to the Consolidated Financial Statements Consolidated balance sheets

FY2009 (As of March 31, 2010)

FY2010 (As of March 31, 2011)

Accumulated depreciation of tangible fixed assets ¥33,444 million

Accumulated depreciation of tangible fixed assets ¥33,123 million

Consolidated statements of income



Principal selling, general, and administrative expenses Provision for accrued bonuses ¥1,078 millionProvision for accrued officers’ bonuses ¥8 million

Retirement benefit expense ¥1,192 millionSalaries, wages, and other payroll costs ¥13,690 million

Provision of allowance for doubtful accounts ¥134 million

Principal selling, general, and administrative expenses Provision for accrued bonuses ¥1,174 millionRetirement benefit expense ¥1,154 millionSalaries, wages, and other payroll costs ¥13,873 million

―――――――――― Components of loss resulting from disaster Provision of allowance for loss resulting from disaster ¥15 million

Other ¥8 million

Consolidated Statements of Comprehensive Income


Comprehensive income in immediately preceding fiscal year Comprehensive income attributable to owners of the parent ¥1,600 million Comprehensive income attributable to minority interests ¥171 million Total ¥1,772 million

Other comprehensive income in immediately preceding fiscal year

Net unrealized gains (losses) on available-for-sale securities ¥185 million Foreign currency translation adjustments ¥397 million Share of other comprehensive income of affiliates accountedfor using the equity method ¥10 million

Total ¥593 million

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Consolidated statement of changes in shareholders’ equity

FY2009 (year ended March 31, 2010) 1. Shares issued and outstanding

Share type As of March 31, 2009 Increase Decrease As of March 31, 2010

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

2. Shares of treasury stock


Common stock (shares) 4,656,810 1,897 ― 4,658,707 (Summary analysis of change) The primary components of the increase in the number of shares are as follows:

Increase as a result of purchases of odd-lot shares: 1,897

3. Share subscription rights Not applicable

4. Dividends

(1) Dividends paid

Resolution Share type Total dividend (Millions of yen)

Dividend per share(Yen) Date of record Effective date

Ordinary general meeting of shareholders, June 26, 2009

Common stock 995 13 March 31, 2009 June 29, 2009

Board of directors meeting, November 5, 2009 Common stock 995 13 September 30,

2009 December 2, 2009

(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. Resolution Share type Dividend

funding Total dividend

(Millions of yen)Dividend per share

(Yen) Date of record Effective date


Common stock Retained earnings 995 13 March 31,

2010 June 30, 2010

30

FY2010 (year ended March 31, 2011) 1. Shares issued and outstanding


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

2. Shares of treasury stock Share type As of March 31,

2010 Increase Decrease As of March 31, 2011

Common stock (shares) 4,658,707 2,215 ― 4,660,922

(Summary analysis of change) The primary components of the increase in the number of shares are as follows:

Increase as a result of purchases of odd-lot shares: 2,215

3. Share subscription rights Not applicable

4. Dividends

(1) Dividends paid Resolution Share type Total dividend

(Millions of yen)Dividend per share



Common stock 995 13 March 31, 2010 June 30, 2010

Board of directors meeting, November 5, 2010 Common stock 995 13 September 30,

2010 December 2, 2010

(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 Resolution Share type Dividend

funding Total dividend

(¥Million) Dividend per share



Common stock Retained earnings 995 13 March 31,

2011 June 30, 2011

Consolidated Statements of Cash Flows



Reconciliation of year-end balance of cash and cash equivalents and amounts stated in the consolidated balance sheets

Cash and bank deposits ¥23,675 millionTime deposits deposited for more than 3 months ¥(2,742) million

Cash and cash equivalents ¥20,932 million

Reconciliation of year-end balance of cash and cash equivalents and amounts stated in the consolidated balance sheets

Cash and bank deposits ¥27,264 millionTime deposits deposited for more than 3 months ¥(2,651) million

Cash and cash equivalents ¥24,613 million

31

Segment Information Segment information by business FY2009 (year ended March 31, 2010)

Time information

systems (Millions of yen)

Environment systems

(Millions of yen)

Total (Millions of yen)

Eliminations/ Corporate

(Millions of yen)

Consolidation total

(Millions of yen)І Net sales and operating P/L

Net sales

(1) To customers 59,542 19,043 78,586 ― 78,586

(2) Intersegment ― ― ― ― ―

Total 59,542 19,043 78,586 ― 78,586

Operating expenses 55,249 18,888 74,138 2,520 76,659

Operating profit 4,292 155 4,447 (2,520) 1,927II Assets, depreciation, capital

expenditures

Assets 46,753 16,264 63,018 37,668 100,687

Depreciation 3,626 623 4,249 426 4,676

Capital expenditures 3,114 214 3,329 9 3,339Note: 1. As described below, the business segments are formed by the demarcation of business into Time Information System

Business and Environment System Business. From among the units and activities relating to sales and maintenance within the company that submits these consolidated financial statements, it is not possible to apportion selling expenses to particular sales categories, and thus for internal administrative purposes, segmentation has been carried out by business segment.

2. Principal products in each business segment

Business segment Sales category Principal products

Information systems

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

Time management equipment

PC-interface time recorders, computerized time recorders, standard electronic time recorders, electronic time stamps, numbering machines, patrol recorders

Time information system business

Parking systems

Automated fee systems, access control systems, parking lot management systems, bicycle parking systems, time registers, parking tower management systems, Internet parking guidance systems, parking lot total management services

Environmental systems

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

Environment system business

Clean systems

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

3. Among operating expenses, the principal unallocated operating expenses included in the “Eliminations/Corporate” item relate to divisions conducting Company-wide administrative activities, such as the parent company General Affairs Department.

FY2009 (year ended March 31, 2010): ¥2,520 million

32

4. Among assets, the principal Company-wide assets included in the “Eliminations/Corporate” item include surplus funds investments (cash and securities) at the parent company, long-term investment funds (investment securities and long-term deposits), and assets relating to administrative divisions.

FY2009 (year ended March 31, 2010): ¥37,668 million5. Change in accounting policies

Conversion method for financial statement entries of foreign subsidiaries, etc. With effect from this fiscal year, the conversion method for the income and expenses of overseas subsidiaries, etc. has changed to an average exchange rate basis during the period. The effect of this change is to increase segment operating profit in the time information system business and in the environment system business by ¥2 million and ¥0 million, respectively, for this fiscal year, relative to the corresponding amounts calculated under the method used previously.

Segment information by geographical area FY2009 (year ended March 31, 2010)

Japan

(Millions of yen)

Other Asia(Millions of

yen)

North America

(Millions of yen)

Europe (Millions of

yen)

Total (Millions of

yen)

Eliminations/ Corporate

(Millions of yen)

Consolidation total

(Millions of yen)

І Net sales and operating P/L

Net sales

(1) To customers 58,182 4,206 10,517 5,678 78,586 ― 78,586

(2) Intersegment 1,265 12 161 30 1,469 (1,469) ―

Total 59,447 4,219 10,679 5,709 80,055 (1,469) 78,586

Operating expenses 54,982 3,910 10,737 6,038 75,668 990 76,659

Operating profit (loss) 4,465 308 (57) (328) 4,387 (2,460) 1,927

II Assets 41,618 3,785 9,704 9,315 64,423 36,263 100,687Notes 1. Method of segmentation of countries/regions and principal countries/territories included in each region

(1) The national and regional demarcations are in accordance with the degree of geographical proximity. (2) Principal countries in each region:

(a) Other Asia: Singapore, Thailand, Malaysia, Indonesia, South Korea, China (b) North America: United States, Canada (c) Europe: France, Belgium, Spain

2. Among operating expenses, the principal unallocated operating expenses included in the “Eliminations/Corporate” item relate to divisions conducting Company-wide administrative activities, such as the parent company General Affairs Dept.

FY2009 (year ended March 31, 2010): ¥2,520 million3. Among assets, the principal Company-wide assets included in the “Eliminations/Corporate” item include surplus funds

investments (cash and securities) at the parent company, long-term investment funds (investment securities and long-term deposits), and assets relating to administrative divisions.

FY2009 (year ended March 31, 2010): ¥37,668 million4. Change in accounting policies

FY2009 (year ended March 31, 2010) Conversion method for financial statement entries of foreign subsidiaries, etc. With effect from this fiscal year, the conversion method for the income and expenses of overseas subsidiaries, etc. has changed to an average exchange rate basis during the period. The effect of this change is to reduce segmental operating profit in Asia by ¥11 million and to reduce segment operating loss in North America and in Europe by ¥5 million and ¥7 million, respectively, for this fiscal year, relative to the corresponding amounts calculated under the method used previously.

33

Overseas sales FY2009 (year ended March 31, 2010)

Other Asia North America Europe Other regions Total

I Overseas sales (Millions of yen) 4,353 10,526 5,678 171 20,730II Consolidated net sales (Millions of

yen) 78,586

III Proportion of consolidated net sales accounted for by overseas sales (%) 5.6 13.4 7.2 0.2 26.4

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

2. Method of segmentation of countries/regions and principal countries/territories included in each region (1) The national and regional demarcations are in accordance with the degree of geographical proximity. (2) Principal countries in each region:

(a) Other Asia: Singapore, Thailand, Malaysia, Indonesia, South Korea, China (b) North America: United States, Canada (c) Europe: France, Belgium, Spain (d) Other regions: Central and South America

3. Change in accounting policies FY2009 (year ended March 31, 2010) Conversion method for financial statement entries of foreign subsidiaries, etc. With effect from this fiscal year, the conversion method for the income and expenses of overseas subsidiaries, etc. has changed to an average exchange rate basis during the period. The effect of this change is to reduce segment net sales in Asia, North America, and Europe by ¥130 million, ¥32 million, and ¥139 million, respectively, for this fiscal year, relative to the corresponding amounts calculated under the method used previously.

Segment Information (Additional information)

Since this fiscal year, the Company has applied the “Accounting Standards for the Disclosure of Segment Information, etc.” (ASBJ Statement No. 17, March 27, 2009) and the “Guidelines for the Application of Accounting Standards for the Disclosure of Segment Information, etc.” (ASBJ Guidance No. 20, March 21, 2008).

1. Outline of Reporting Segments

The reporting segments are defined as those business units which constitute the Company and from which separate financial information can be obtained. The reporting segments are periodically reviewed by the Company’s supreme decision-making body to determine the allocation of managerial resources and evaluate financial results. The Company maintains several business headquarters at its head office, separated into product and service type. The role of these business headquarters is to formulate and implement domestic business strategies for similar types of products and services. In overseas business, meanwhile, local subsidiaries in each region develop strategies in their respective business fields in cooperation with the related business headquarters at the head office and carry out business activities in accordance with such strategy. Based on the above, the Company divides its business into two segments from which separate financial information can be obtained on a consolidated basis: the Time Information System Business and the Environment System Business. The operating results of these two segments are periodically reviewed by the Company’s supreme decision-making body to determine the allocation of managerial resources and evaluate financial results. As described above, the Company’s reporting segments consist of the Time Information System Business and the Environment System Business. The Time Information System Business and the Environment System Business manufacture and sell the following products:

34

Business segment Sales category Principal products

Information systems

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

Time management equipment

PC-interface time recorders, computerized time recorders, standard electronic time recorders, electronic time stamps, numbering machines, patrol recorders


Parking systems

Automated fee systems, access control systems, parking lot management systems, bicycle parking systems, time registers, parking tower management systems, Internet parking guidance systems, parking lot total management services

Environmental systems

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

Environment system business

Clean systems Commercial vacuum cleaners, road and industrial sweepers, automatic floor scrubbers, high-speed burnishers, dry-care cleaning systems, carpet cleaning system, chemical products, supplies and accessories

2. Methodology for Determining Net Sales, Profit/Loss, Assets, Liabilities, and Other Line Item Amounts by Reporting

Segment The accounting methods used by the reporting business segments are the same as those described in the Basis of Presentation of the Consolidated Financial Statements section. Profits for the reporting segments are reported at the operating profit level. Intersegment internal earnings and transfers are based on the prices currently prevailing in the markets.

3. Information by Reporting Segment Regarding Net Sales, Profit/Loss, Assets, Liabilities, and Other Line Item

Amounts FY2009 (year ended March 31, 2010)

(Millions of yen)Reporting segments


Environment system business Total

Adjustments Note 1

Amounts reported in consolidated financial

statements Note 2

Net sales To customers 59,542 19,043 78,586 ― 78,586Intersegment ― ― ― ― ―

Total 59,542 19,043 78,586 ― 78,586Segment profit (loss) 4,292 155 4,447 (2,520) 1,927Segment assets 46,753 16,264 63,018 37,668 100,687Other items

Depreciation and amortization 3,626 623 4,249 426 4,676Investments in affiliates accounted for using the equity method

308 ― ― ― 308

Increases in tangible and intangible fixed assets 3,114 214 3,329 9 3,339

Notes: 1. The details of adjustments are as follows: (1) The ¥(2,520) million adjustment in segment profit indicates company-wide expenses not allocated to the reporting

segments. Company-wide expenses consist mainly of general and administrative expenses that do not belong to any of the reporting segments.

(2) The ¥37,668 million adjustment in segment assets indicates company-wide assets not allocated to the reporting segments. Company-wide assets consist mainly of assets and others associated with the administration function that do not belong to any of the reporting segments.

2. Segment profit is reconciled with operating profit in the consolidated statement of income.

35


(Millions of yen)Reporting segments



Adjustments Note 1

Amounts reported in consolidated financial

statements Note 2

Net sales To customers 61,789 21,513 83,302 ― 83,302Intersegment ― ― ― ― ―

Total 61,789 21,513 83,302 ― 83,302Segment profit (loss) 5,717 1,473 7,190 (2,807) 4,383Segment assets 34,549 27,518 62,068 40,864 102,932Other items

Depreciation and amortization 3,454 487 3,942 408 4,351Investments in affiliates accounted for using the equity method

259 ― ― ― 259

Increases in tangible and intangible fixed assets 2,863 118 2,982 46 3,029

Notes: 1. The details of adjustments are as follows: (1) The ¥(2,807) million adjustment in segment profit indicates company-wide expenses not allocated to the reporting

segments. Company-wide expenses consist mainly of general and administrative expenses that do not belong to any of the reporting segments.

(2) The ¥40,864 million adjustment in segment assets indicates company-wide assets not allocated to the reporting segments. Company-wide assets consist mainly of assets and others associated with the administration function that do not belong to any of the reporting segments.

2. Segment profit is reconciled with operating profit in the consolidated statement of income.

(Related Information)

FY2010 (year ended March 31, 2011) 1. Information by Product and Service

This information has been omitted here, because similar information is disclosed in the Segment Information section.

2. Information by Geographical Region

(1) Net Sales (Millions of yen)

Japan North America Other Total 62,022 10,041 11,239 83,302

Note: Net sales are divided by country/region, based on the geographical locations of the Company’s customers.

(2) Tangible Fixed Assets (Millions of yen)

Japan Other Total 20,079 2,377 22,456

3. Information by Major Customer

There is no information to be disclosed here, because no single external customer the Company deals with accounts for at least 10% of net sales that appear on the consolidated statement of income.

(Information on Impairment Loss in Fixed Assets for Each Reporting Segment) FY2010 (year ended March 31, 2011)

None

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Information on Amortization of Goodwill and Balance Yet to Be Amortized for Each Reporting Segment FY2010 (year ended March 31, 2011)

(Millions of yen) Reporting segments



Other Eliminations/ Corporate Total

Value amortized during the year 666 51 718 ― ― 718

Ending balance 5,455 ― 5,455 ― ― 5,455

Information on Gain on Negative Goodwill for Each Reporting Segment FY2010 (year ended March 31, 2011) In December 2010, the Company acquired all minority interests in Amano Management Service Corporation and in three other Japan-based consolidated subsidiaries, and made each a wholly owned subsidiary of the Company. This and other events caused a negative goodwill gain of ¥990 million to be recognized in extraordinary income for this fiscal year. This gain on negative goodwill is not attributable to any particular single reporting segment, so is recognized as corporate income.

37

Deferred tax accounting

FY2009 (As of March 31, 2010)

FY2010 (As of March 31, 2011)

1. Breakdown of principal origins of deferred tax assets and liabilities

(Deferred tax assets) (millions of yen)Accrued enterprise tax 19 Accrued bonuses not deductible until paid 664

Nondeductible accounts payable and long-term accounts payable 130

Accrued retirement benefits for employees not deductible until paid 1,562

Loss carried forward 708 Valuation loss on investment securities 249 Surplus on allowance for doubtful accounts 95

Unrealized gain on other securities 80 Unrealized profit 252 Other 532

Deferred tax assets (subtotal) 4,295 Valuation allowance (763)

Total deferred tax assets 3,531 (Deferred tax liabilities) Reserve for advanced depreciation of building (19)

Intangible fixed assets obtained by acquisition (322)

Other (112) Total deferred tax liabilities (454) Net deferred tax assets 3,077

1. Breakdown of principal origins of deferred tax assets and liabilities

(Deferred tax assets) (millions of yen)Accrued enterprise tax 143 Accrued bonuses not deductible until paid 716

Nondeductible accounts payable and long-term accounts payable 100

Accrued retirement benefits for employees not deductible until paid 1,387

Loss carried forward 714 Valuation loss on investment securities 292 Surplus on allowance for doubtful accounts 69

Unrealized gain on other securities 105 Unrealized profit 317 Other 583

Deferred tax assets (subtotal) 4,431 Valuation allowance (932)

Total deferred tax assets 3,499 (Deferred tax liabilities) Reserve for advanced depreciation of building (18)

Intangible fixed assets obtained by acquisition (286)

Other (103) Total deferred tax liabilities (408) Net deferred tax assets 3,090

2. Principal components of significant differences arising between the statutory tax rate and the effective tax rate Statutory tax rate 40.6%(Adjustments) Entertainment and other nondeductible expenses 0.9

Dividend and other nontaxable income (4.2)

Inhabitant tax per capita 3.2 Nondeductible amortization of goodwill 8.7

Realization of tax benefits on operating losses (0.6)

Tax credit for research and development expenses (1.4)

Increase (decrease) in valuation reserve 8.6

Tax-rate difference for overseas subsidiaries (3.0)

Equity method investment gain (1.0) Other (1.6)

Actual tax rate 50.2

2. Principal components of significant differences arising between the statutory tax rate and the effective tax rate Statutory tax rate 40.6%(Adjustments) Entertainment and other nondeductible expenses 1.0

Dividend and other nontaxable income (3.1)

Inhabitant tax per capita 1.5 Nondeductible amortization of goodwill 4.2

Realization of tax benefits on operating losses (0.4)

Tax credit for research and development expenses (1.5)

Increase (decrease) in valuation reserve 1.3

Tax-rate difference for overseas subsidiaries (2.1)

Equity method investment gain (0.3) Other (0.1)

Actual tax rate 41.1

38

Securities FY2009 (year ended March 31, 2010)

1. Held-to-maturity bonds (As of March 31, 2010) (Millions of yen)

Type Balance-sheet amount at fiscal year-end

Market price at fiscal year-end Unrealized gains (losses)

Bonds whose market price does not exceed the balance-sheet amount 1,426 1,422 (3)

Total 1,426 1,422 (3)

2. Other securities (As of March 31, 2010)

(Millions of yen))

Type Balance-sheet amount at fiscal year-end Acquisition cost Unrealized gains (losses)

Securities for which balance sheet amount exceeds acquisition cost

Stocks 952 731 221

Bonds ― ― ―

Other 301 300 1

Subtotal 1,253 1,031 222

Securities for which balance sheet amount does not exceed acquisition cost

Stocks 1,602 2,020 (418)

Bonds ― ― ―

Other 96 100 (3)

Subtotal 1,699 2,120 (421)

Total 2,953 3,151 (198)

3. Other securities sold during the year April 1, 2009, to March 31, 2010

(Millions of yen)

Type Sale price Gain on sale Loss on sale

Stocks ― ― ―

Bonds 50 0 ―

Other ― ― ―

Total 50 0 ―

39


1. Held-to-maturity bonds (As of March 31, 2011)

(Millions of yen)

Type Balance-sheet amount at fiscal year-end

Market price at fiscal year-end Unrealized gains (losses)

Bonds whose market price does not exceed the balance-sheet amount 1,489 1,487 (2)

Total 1,489 1,487 (2)

2. Other securities (As of March 31, 2011)

(Millions of yen))

Type Balance-sheet amount at fiscal year-end Acquisition cost Unrealized gains (losses)

Securities for which balance sheet amount exceeds acquisition cost

Stocks 817 562 254

Bonds ― ― ―

Other 305 300 5

Subtotal 1,122 862 260

Securities for which balance sheet amount does not exceed acquisition cost

Stocks 1,684 2,192 (507)

Bonds ― ― ―

Other 387 400 (12)

Subtotal 2,072 2,592 (520)

Total 3,195 3,455 (259)

3. Other securities sold during the year April 1, 2010 to March 31, 2011

(Millions of yen)

Type Sale price Gain on sale Loss on sale

Stocks 0 ― 0

Bonds ― ― ―

Other ― ― ―

Total 0 ― 0

40

Retirement benefits



1. Outline of the retirement benefit plans adopted Defined benefit corporate pension scheme: From March 1,

2009, the Company adopted a defined benefit corporate pension scheme as part of its retirement benefit plan.

Defined contribution pension scheme: From March 1, 2009, the Company adopted a defined contribution pension scheme as part of its retirement benefit plan.

Employees’ pension fund: Since April 1, 1980, the Company has used an employees’ pension fund plan (comprehensive establishment type) as a supplement to its existing retirement benefit plan. As of March 31, 2010, the total pension assets of the said pension fund included ¥14,053 million of pension assets computed on the basis of the total proportion of benefits that the fund accounts for.

1. Outline of the retirement benefit plans adopted Defined benefit corporate pension scheme: From March 1,

2009, the Company adopted a defined benefit corporate pension scheme as part of its retirement benefit plan.

Defined contribution pension scheme: From March 1, 2009, the Company adopted a defined contribution pension scheme as part of its retirement benefit plan.

Employees’ pension fund: Since April 1, 1980, the Company has used an employees’ pension fund plan (comprehensive establishment type) as a supplement to its existing retirement benefit plan. As of March 31, 2011, the total pension assets of the said pension fund included ¥12,247 million of pension assets computed on the basis of the total proportion of benefits that the fund accounts for.

2. Retirement benefit obligations (¥ million)

(1) Projected benefit obligations 10,150 Breakdown: (2) Unrecognized prior service cost (32) (3) Unrecognized actuarial

difference 723

(4) Plan assets 5,590 Difference 3,868

(5) Prepaid pension expenses 14 (6) Accrued retirement benefits 3,883

2. Retirement benefit obligations (¥ million) (1) Projected benefit obligations 10,224 Breakdown: (2) Unrecognized prior service cost (28) (3) Unrecognized actuarial

difference 626

(4) Plan assets 6,193 Difference 3,433

(5) Prepaid pension expenses 21 (6) Accrued retirement benefits 3,454

41

FY2009

(year ended March 31, 2010) FY2010

(year ended March 31, 2011)

3. Retirement benefit expenses (¥ million) (1) Service cost (not including (6)) 573 (2) Interest cost 248 (3) Expected return on plan assets (164) (4) Amortization of prior service

cost (3)

(5) Amortization of actuarial loss 249

Subtotal 902 (6) Employees’ pension fund 507 (7) Other* 345 Total 1,755

* Contribution paid to defined contribution pension scheme

3. Retirement benefit expenses (¥ million) (1) Service cost (not including (6)) 579 (2) Interest cost 243 (3) Expected return on plan assets (193) (4) Amortization of prior service

cost (3)

(5) Amortization of actuarial loss 205

Subtotal 831 (6) Employees’ pension fund 494 (7) Other* 341 Total 1,667

* Contribution paid to defined contribution pension scheme

4. Assumptions used in the calculation of retirement benefit obligations (1) Method of attributing projected

benefits to periods of service Straight-line basis

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

assets 3.5%

(4) Amortization period for prior service cost 10 years

(The method used is to charge this proportionately to income for a fixed number of years within the average remaining period of service of Company employees when it arises.)

(5) Amortization period for actuarial difference 10 years

(The method used is to charge this proportionately to income for a fixed number of years within the average remaining period of service of Company employees at the time it arises. The amounts are charged to income from the following fiscal year.)

4. Assumptions used in the calculation of retirement benefit obligations (1) Method of attributing projected

benefits to periods of service Straight-line basis

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

assets 3.5%

(4) Amortization period for prior service cost 10 years

(The method used is to charge this proportionately to income for a fixed number of years within the average remaining period of service of Company employees when it arises.)

(5) Amortization period for actuarial difference 10 years

(The method used is to charge this proportionately to income for a fixed number of years within the average remaining period of service of Company employees at the time it arises. The amounts are charged to income from the following fiscal year.)

42

Per-share data

Item FY2009 (year ended March 31, 2010)


Net assets per share 964.78 yen 945.23 yen

Net income per share 13.20 yen 40.01 yen

Diluted net income per share ― ―

Details of diluted net income per share are not stated, because there are no potential shares.

Same as on the left

Note: The basis for these calculations is as follows: 1. Net assets per share

Item FY2009 (As of March 31, 2010)

FY2010 (As of March 31, 2011)

Total net assets in consolidated balance sheet (Millions of yen) 74,967 72,561

Net assets relating to common stock (Millions of yen) 73,901 72,401Principal component of the difference (Millions of yen)Minority interests 1,066 159No. of shares of common stock issued (Thousands) 81,257 81,257No. of shares of common stock held as treasury stock (Thousands) 4,658 4,660

No. of shares of common stock used to compute net assets per share (Thousands) 76,599 76,596

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



Net income in the consolidated statements of income (Millions of yen) 1,010 3,064

Net income relating to common stock (Millions of yen) 1,010 3,064

Average no. of shares of common stock outstanding during the term (Thousands) 76,599 76,598

Significant subsequent events

None

Summary Financial Statements (Consolidated) for …FY 2010 (year ended March 31, 2011) 102,932...

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