FINANCIALREPORT
April 2017 - March 2018

Management Policy
1. Basic Management Policy
Amano’s management philosophy is to create new values and contribute to the realization ofa safe, comfortable and a wholesome society in the fields of “People & Time” and “People &Environment.”
Under this management philosophy and based on an optimal governance structure that responds to changes in the business environment, we will strive to maximize corporate value by
ensuring sustained growth through the creation of new businesses and markets with a mediumto-long term global perspective, in addition to expanding our existing businesses. Furthermore,
we will aim to become a company that has the trust and high regard of all the stakeholders
including customers, business partner companies, shareholders, employees and the local community by constantly returning a fair profit earned through business activities.

2. Medium- to Long-term Corporate Management Strategies and Issues to Address
Amano launched the 7th Medium-term Business Plan for the three years from April 2017 toMarch 2020. An outline of the plan is set out below.
[1] Basic Policies
Under the 7th Medium-term Business Plan, with the Group’s management concept of “The2nd Stage Towards a 100-year Company-Innovative Creation of Value for Sustainable Growth,”
we will address four key issues towards achieving the goal of “enhancing our corporate value”
while emphasizing compliance and further strengthening corporate governance as a foundation.
(1)	Regional Growth Strategies: Promote growth strategy for each of the four regions (Japan,
North America, Europe and Asia).
(2)	Reinforcement Management Foundation: Reinforce management practices based on productivity improvement by continuing cost reduction activities and a work style reform.
(3)	Create Innovation: Aim to be the clear niche leader and build the sixth and seventh corebusinesses.
(4)	Improve Brand Value: Promote the enhancement of the value of Amano brands throughefforts to address the key issues described above.
The target of the new medium-term business plan is the achievement of the “triple 11.”(1)	Operating profit ratio: 11% or more(2)	ROE: 11% or more(3)	The ratio of consolidated net sales to non-consolidated net sales: 11% growth
Measures and issues for each region under these basic policies are as follows:
1. Japanese market
In the Japanese market, we will reinforce ties among domestic Group companies and also withother companies outside the Group and strengthen our capacity to provide holistic solutions(which cover hardware, software, and services) across all business fields both qualitatively andquantitatively. We will also promote the strategic “3-in-1 activity” to increase our customer
base by cultivating and further attracting existing customers and aim to be the clear niche
leader on a medium- to long-term basis in each business field.
The Information Systems business is witnessing tangible demand for time & attendance management systems, which enables proper employee work management. Amid the implementation of the Japanese government guidance to eradicate long working hours (overworking) andto improve productivity, corporate measures to establish a framework to manage appropriate
work hours have become the subject of attention. In addition, against the backdrop of the revision to the Labor Standards Act, which aims to facilitate diverse ways of working, it is expectedthat demand for system upgrades along with systems utilizing cloud services and smart devices
will increase.
1

In response to this market environment, we will enhance our customer base by providing a
one-stop service covering hardware, software and cloud services. For the small-to-medium
sized enterprise market, we will further strengthen the marketing of TimePro-NX, a software
package launched last year that provides holistic solutions for time & attendance, humanresource management and payroll. For the medium-to-large enterprise market, we will collaborate with CREO CO., LTD., to provide software for time & attendance, human resource
management, payroll and accounting, and in addition, we will strengthen consulting activities
to become an “HR solutions vendor” in order to expand our business domains.
The Parking Systems business is witnessing continuing growth in the nation’s parking lot market owing to the real estate market becoming buoyant in advance of the 2020 Tokyo Olympics.
In addition to the need for parking lot management cost reduction, ensuring safety and security
in parking lots, consideration for the environment and the improvement of user convenience,
the need to propose solutions for new operational methods such as web-based or cashless useof parking lots has been increasing.
Given this market environment, we will further strengthen partnerships with major parking lot
management companies and provide various services through our parking lot data center forsmall- and medium-sized parking lot management companies while improving the functions
and operability of system equipment. In order to respond to transitions in the market including
the increased demand for parking reservations and the migration towards a sharing economy,
we will aim to become a “total parking solutions vendor.” In addition, we will continue tostrengthen and expand our efforts for facilities such as bicycle parking lots, security gates andtoll roads in order to expand our business.
In Environmental Systems, capital investment by companies in Japan, especially automobilerelated firms, remained solid, and capital investment by Japanese companies operating overseas including in the U.S., was strong, while the Chinese economy continued to improve.
Given this market environment, in Japan we will aim to increase the quantity of sales of standard equipment by rolling out new products and expand business domains including the pharmaceutical, food, and cosmetics markets, which are less affected by business sentiments. We
will also work to strengthen our engineering capabilities and comprehensive sales, includingthat of peripheral equipment, by partnering with industrial equipment manufacturers and aim
to become an “M2M partial solutions vendor.”In the Clean Systems, while the trend of companies trying to reduce cleaning costs continues,
amid the aging of sanitation workers and an increase in the number of inexperienced workers,
the need to improve safety and operability of cleaning equipment has been increasing. At thesame time, the need to maintain building aesthetics at a low cost has also been increasing.
In response to these market conditions, we will expand the robotic cleaning devices market(robotic scrubbers, robotic vacuum cleaners), the factory market with new model scrubbers
as well as a business producing an income stream by increasing maintenance contracts andorder intakes for supply goods, thus bolstering our customer base in Japan. With the aim of becoming a “robotic solutions vendor,” which focuses on cleaning robotic devices, we will also
promote comprehensive proposals, including those for commissioned cleaning services andaesthetic maintenance.
2. North American market
In the Parking Systems business, we will step up sales of Amano McGann, Inc.’s system equipment
and have a new system that target the low-end market gain a foothold at an early stage. In the Information Systems business, we will strive to expand operations by increasing sales of Accu-Time
Systems, Inc.’s time and attendance information terminals and by developing cloud services. In the
Clean Systems business, we will further expand the business of the wooden floor sanding equipment division of Amano Pioneer Eclipse Corp. and develop new niche areas and channels. In theEnvironmental Systems business, at Mexican subsidiary established two years ago, we will boost
sales of standard equipment to Japanese companies operating in the region, especially automobilerelated businesses.

23.European market
In the Information Systems business, we will further enhance our customer base by promoting
Horoquartz’s workforce management and access control businesses. In the Parking Systems
business, we will strive to expand operations by developing a commissioned parking lot management business.
4. Asian market
In the Asian region, we will aim to expand Parking Systems operations by strengthening services in the commissioned parking lot management business and by expanding services into
new regions. In the Environmental Systems business, we will strengthen our engineering capabilities as well as sales and service systems for Japanese companies operating in Asia by making use of the 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 cost competitiveness.
Other issues that need to be addressed are listed below:
1. Practical implementation of a work style reform
With the aim of improving productivity of the whole Group, we will continue the efforts toincrease productivity by having each employee regulate their biological clock and create atimetable which reflects the prioritization of their job duties. We will publish examples andthe results of our company’s efforts as an “HR solutions vendor” to the public and incorporatesuch examples to enhance the product appeal of time & attendance systems.
2. Create innovation
We will aim to become the “clear niche leader” by increasing each business division’s No. 1
areas. We will also promote open innovation by acquiring technology and know-how fromcompanies outside our Group through cooperation with venture companies and M&As regardless of our existing technology and know-how in order to build the “sixth and seventh corebusinesses” as new businesses. In addition, with future market trends in mind, we will promoteresearch and development that is not necessarily limited to our current product or service
lineup (to defeat innovation dilemmas) in order to aim for leading-edge business development
utilizing AI, IoT, robotic devices and the web.
3. Further improvement of brand value
IIn order to improve our corporate value, we will strive to gain wider recognition of our company in the overall market by taking advantage of mass media and social media, and aim tofurther enhance our brands by strongly promoting each business division’s brand strategies andby creating synergy effects with our Group companies more than ever before.
[2] Numerical targets
We are aiming to achieve ¥140.0 billion or higher in net sales and ¥16.0 billion or higher inoperating profit for the fiscal year ending March 31, 2020, which is the final year of the plan.

Numerical targets

Net sales
Operating profit
Operating profit ratio (%)
Ordinary profit
Net income attributable to ownersof the parent company(Millions of yen)

FY 2017(ended March 2018)(Results)
AmountYoY (%)
124,405
3.6%
14,3509.0%
11.5%–
15,0609.1%
10,0198.6%

3FY 2018(ending March 2019)

FY 2019(ending March 2020)

Amount130,000
15,00011.5%
15,700YoY (%)
4.5%
4.5%
–
4.2%

Amount142,000
16,00011.3%
16,400YoY (%)
9.2%
6.7%
–
4.5%

9,800

(2.2%)

10,80010.2%

3. Basic Policy on Distribution of Profits and Payment of Dividends for This Fiscal Yearand the Next
Amano places great importance on its policy of paying dividends to shareholders. Its fundamental policy to return profits to shareholders is to make appropriate results-based distributions and to buy back treasury stock, as it deems necessary. The Company aims to maintain adividend payout ratio of at least 40% on a consolidated basis and a dividend on equity ratio ofat 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 ¥34 per share. As a result, the annual per-share dividend for this fiscal year will be ¥57 (including ¥23 per share paid as the interim dividend), an increase of ¥5compared with the previous fiscal year. This corresponds to a dividend payout ratio of 43.3%
and a 4.2% 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 Fiscal Year Ending March 31, 2019, we aim to
pay an annual per-share dividend of ¥57 (with an interim dividend of ¥25 and a year-end dividend of ¥32).
Retained earnings will be earmarked to fund effective investment aimed at the fundamental
enhancement of the Company’s capacity to conduct its business operations. This will include
the expansion and strengthening of existing business fields, strategic investment in growthfields, and spending on research and development, as well as the rationalization of production
plants and equipment for the purpose of reducing costs and further improving product quality.

Hiroyuki TSUDA
President
Representative Director

4General Business Results
Business Results in the Year Ended March 31, 2018

General Business Results for This
Fiscal Year
During the consolidated fiscal year
under review, the U.S. economy
remained steady and the Chinese
economy continued to improve,
despite the uncertainties regarding
the future prospects of geopolitical risks and political and economic
trends in the U.S. and Europe. In
this situation, the Japanese economy
remained on a recover y trend, as
the employment environment andcapital investment remained solidand expor ts increased against the

As a result of the above, during the
fiscal year under review, the Company recorded sales of ¥124,405
million, up by 3.6% year-on-year.
Operating profit increased by 9.0%
to ¥14,350 million, ordinary profit
went up by 9.1% to ¥15,060 million,
and net income, which is attributable to parent company shareholders, increased by 8.6% to ¥10,019
million, resulting in increases in bothsales and profit.

backdrop of robust corporate performances.
Amid this business environment, theAmano Group set forth the management concept of “The 2nd Stage
Towards a 100-year Company—
Innovative Creation of Value for
Sustainable Growth” in the new
medium-term management plan
launched in April 2017, aiming at
achieving growth in Japan, Nor th
America, Europe and Asia, respectively. The Amano Group has also
been striving to strengthen management practices through cost reduction activities and Amano’s work
style reform methodology.

The following is a breakdown ofsales by business division.

Sales by business division(Unit: Millions of yen)

FY2016
Category

FY2017

Change(April 1, 2016–March 31, 2017) (April 1, 2017–March 31, 2018)
AmountRatio (%)

AmountRatio (%)

Amount%Information Systems

24,78920.6

26,759

21.5

1,970

7.9

Time Management Products

3,818

3.2

3,751

3.0

(66)

(1.7)

Parking Systems

58,40248.6

60,757

48.8

2,354

4.0

87,01072.4

91,268

73.3

4,257

4.9

Environmental Systems

21,712

18.1

21,993

17.7

281

1.3

Clean Systems

11,401

9.5

11,143

9.0

(257)

(2.3)

Subtotal

33,11327.6

33,136

26.7

23

0.1

Total

120,124100.0

124,405

100.0

4,281

3.6

Time Information System business:

Subtotal
Environment System business:

5Time Information System business• Information Systems:
Time & attendance (T&A), payroll,human-resource management, access
control, and cafeteria systems• Time Management Products:
Time recorders and time stamps• Parking Systems:
Parking and bicycle-parking space
management systems, and commissioned parking lot management service
Sales in this business division totaled¥91,268 million, representing an increase of ¥4,257 million (4.9%) yearon-year. The following is a breakdown of sales by business division.

Information Systems
In this business division, against the
backdrop of the “work style reform”
promoted by the Japanese government, attention is turning to the
future trends of companies’ efforts
to address long working hours, improve productivity and make full useof diverse human resources.
In response to these market conditions, the Company, being “Amano—
active in the area of HR (Human
Resources),” added access control
and security to the list of its “3-in-1”
proposal, comprising time & attendance (T&A), payroll, and humanresource management, thus striving
to bolster its activities to provide
total solutions from system ownership to system use.
Domestic sales for the current term
were as follows. For Amano, on an
unconsolidated basis, hardware sales
decreased by ¥90 million (2.1%),
software sales increased by ¥1,222
million (21.5%), and sales generated by maintenance contracts andsupplies services increased by ¥65
million (1.6%) year-on-year. The de-crease in hardware sales was due
to a rebound from large orders in
the previous term, while the robust
software sales was attributable toincreased orders for “TimePro-NX,”
which is a new piece of software
for small and medium businesses
and “TimePro-VG” for medium andlarge businesses. Sales of cloud services developed by Amano Business
Solutions Corporation increased,
owing to its continuous robust performance.
Overall overseas sales increasedby ¥802 million (8.5%) year-onyear as the sales of both Accu-Time
Systems, Inc . in Nor th Amer icaand Horoquartz S.A. in Europe increased.
As a result of the above, sales in thisbusiness division totaled ¥26,759
million, representing an increase of
7.9% year-on-year.

Time Management Products
Although there is a constant demand for standard devices, thisbusiness division continues to
respond to the current trend toward lower prices. In the meantime, amid the reforms to ways ofworking in Japan, a constant levelof demand for the Company’s
products is being maintained dueto their ease of introduction.
In this mar ket environment, theCompany has been working on expanding its customer base throught h e “ U s e r- c l u b ” ( a f e e - b a s e d
ser vice for members), as well as
concentrating on expanding salesof time recorders equipped withaggregation software compatible
with PCs, which offers improved
usability and functionality.
Overall domestic sales for this fiscal year increased by ¥16 million
6(0.5%) year-on-year, as sales oftime recorders increased.
Overall overseas sales decreasedby ¥152 million (15.2%) year-onyear, as sales in Nor th Americaand Asia fell while sales in Europe
were flat.
As a result of the above , sales
in this business division totaled¥3,751 million, representing a decrease of 1.7% year-on-year.

Parking Systems
To respond to the increasingly diverse needs of parking lot management in Japan, the Parking Systems
business division has been working
on improving the efficiency andreducing the cost of par king lot
management, increasing the levelof convenience for parking lot users, ensuring safety and security inparking lots, and integration with theInternet.
In response to these market cond i t i o n s , t h e C o m p a ny f u r t h e rstrengthened its cooperation withmajor parking lot management firms
and, at the same time, concentrated
on offering various services to small
to medium-sized parking lot management firms through its parking
lot data centers. The Company has
also worked to improve the functionality and usability of its systemequipment and made effor ts to
expand into new markets, such as
bicycle parking systems, security-gate
systems and toll road systems, aswell as strengthening proposals for
improving parking lot management
efficiency and making new proposals
for enhancing parking lot services tousers.
During the current term for Amano,
on an unconsolidated basis, domestic parking equipment sales in-creased by ¥210 million (1.1%) yearon-year due to increases in renewal
orders and orders for security gates,and domestic sales generated bymaintenance contracts and supplies ser vices decreased by ¥113
million (1.2%) year-on-year. Amano
Management Service Corporation’scommissioned parking lot management business has been steadily
expanding with increased sales, andthe number of parking spaces undermanagement increased by 46,000(12.0%) from the end of the previous fiscal year.
Overall overseas sales increased by¥1,551 million (8.5%) year-on-year
due to an increase in sales in the
Asian region as the commissioned
parking lot management businessin Korea, Hong Kong, and Malaysia
grew with the steady expansion,
while sales of Amano McGann, Inc.
decreased in North America.
As a result of the above, sales in thisbusiness division totaled ¥60,757
million, representing an increase of
4.0% year-on-year.

Environment System business• Environmental Systems:
Standard dust collectors, large dust
collection systems, pneumatic powderconveyance systems, high-temperature hazardous-gas removal systems,
and deodorization systems• Clean Systems:
Cleaning equipment, dry-carecleaning systems, cleaning management services, and electrolytic
water generators
The sales in this business totaled¥33,136 million, up by ¥23 million(0.1%) year-on-year. The following
is a breakdown of sales by businessdivision.

Environmental Systems

Clean Systems

In Environmental Systems, companies’ capital investment has remainedsolid in Japan, and the overseas business environment is on a recovery
trend owing to a picking up of the
China’s economy, etc.
In this mar ket environment, theCompany’s domestic strategy focused on capitalizing the demandfor its standard equipment bystrengthening proposals, mainly
targeting automobile-related companies, while seeking to win additional orders from customers in thepharmaceutical, foods and cosmetics
markets. Meanwhile, the Company
enhanced cooper ation with its
overseas Group companies, reinforced its platforms for engineering,sales and services. Furthermore, theCompany endeavored to achieve
greater cost competitiveness by expanding its local procurement, whileobserving the investment trend ofJapanese companies operating overseas.
During the current term for Amano,
on an unconsolidated basis, domestic sales of standard equipment increased by ¥393 million (5.3%), salesof large-scale systems decreasedby ¥1,318 million (19.6%) and sales
generated by maintenance contracts
and supplies services increased by¥386 million (8.2%) year-on-year.
Overall overseas sales increased by¥931 million (32.3%), owing to robust sales in Mexico and signs of recovery of sales in Asia as the China’s
economy is picking up.
As a result of the above, sales of thisbusiness division totaled ¥21,993
million, representing an increase of
1.3% year-on-year.

In Clean Systems, while the trend ofcompanies trying to reduce cleaning
costs continues domestically amid ashortage of sanitary workers in thebuilding maintenance industry, needs
for proposals that lead to higher
cleaning efficiency and improved
quality have been increasing.
In response to these market conditions, we strengthened our proposal,
addressing cleaning issues companies
are facing, through implementationof new cleaning techniques using
cleaning robots and the launch of
the new EG series automatic floor
scrubbers, which further increased
safety levels and improved usability.
For this fiscal year, even though
Amano’s domestic sales of new
products on an unconsolidated basis
fared well, overall domestic sales ofcleaning equipment decreased by¥10 million (0.5%) and domestic
sales generated by maintenancecontracts and supplies services declined by ¥88 million (3.5%) yearon-year.
Overall overseas sales decreasedby ¥101 million (1.8%) year-on-year,
despite the solid performance of thewooden floor sanding equipment
business in North America.
As a result of the above, sales of thisbusiness division totaled ¥11,143
million, representing a decrease of
2.3% year-on-year.

7General Financial Condition
for This Fiscal Year
• Assets
Total assets as of March 31, 2018
amounted to ¥145,446 million, up by¥7,557 million from the previous fiscal
year-end. Current assets increased by¥6,264 million year-on-year. This was
mainly due to increases of ¥5,584 million in cash and bank deposits and ¥706
million in other current assets. Fixed
assets increased by ¥1,293 million yearon-year. This was primarily attributable
to increases of ¥291 million in tangible
fixed assets and ¥1,124 million in investments and other assets due to anincrease in investment securities, despitea decrease of ¥122 million in intangible
fixed assets.
• Liabilities
Total liabilities as of March 31, 2018
amounted to ¥39,812 million, up by¥1,344 million year-on-year. Current liabilities increased by ¥2,136 million yearon-year.This was mainly due to increasesof ¥890 million in accrued income taxes
and ¥1,616 million in other current liabilities following an increase in accrued
expenses. Fixed liabilities decreased by¥791 million year-on-year. This was primarily attributable to decreases of ¥469
million in long-term borrowings and¥364 million in lease obligations.
• Net Assets
Total net assets as of March 31, 2018
amounted to ¥105,634 million, up by¥6,213 million from the previous fiscal
year-end. This was primarily attributable to increases of ¥5,232 million inshareholders’ equity resulting from therecording of net income attributableto owners of the parent company and¥895 million in accumulated other comprehensive income following an increasein translation adjustments, among otherfactors..

General Cash Flows for This
Fiscal Year
Consolidated cash and cash equivalents
increased by ¥4,961 million from theprevious fiscal year-end to a total of¥40,231 million as of March 31, 2018.
The status of each type of cash flow at
year-end and the underlying factors are
as follows.

• Cash flow from operating activities
Net cash provided by operating activities totaled ¥16,750 million. This was
attributable primarily to income before
income taxes amounting to ¥15,280
million, and depreciation and amortization amounting to ¥5,063 million, despite income taxes payments amounting
to ¥4,141 million.
• Cash flow from investing activities
Net cash used in investing activities totaled −¥6,500 million. This was
mainly because, despite the recordingof ¥8,771 million in proceeds fromwithdrawal of time deposits and ¥2,150
million in proceeds from redemptionof securities, the Company recorded
expenditures amounting to ¥9,179 million in time deposits, ¥3,107 million topurchase tangible fixed assets, ¥2,385
million to purchase intangible fixed assets, and ¥2,000 million yen to purchasesecurities.
• Cash flow from financing activities
Net cash used in financing activities
amounted to −¥5,392 million. This was

8

chiefly due to the recording of expenditures amounting to ¥3,954 million in
payment of dividends, ¥1,547 million
in repayment of finance lease obligations, and ¥832 million in purchase oftreasury stock, despite the recording of¥1,331 million yen in proceeds fromsale and leaseback.

Future Outlook
In the next fiscal year ending March 31,
2019, overseas, there will be growing
uncertainty about the future of politicaland economic trends due to geopolitical risks and the destabilization of trade
policies, mainly in the U.S. In this situation, the Japanese economy will likely
remain on a recovery trend as capital
investment will remain strong due toOlympic Games-related demand andthe growth in corporate earnings, while
exports will continue to increase.
Amid this business environment, Amano
Corporation and its Group companies
will set “The 2nd Stage Towards a 100year Company-Innovative Creation of
Value for Sustainable Growth” as its
management concept and work to address key issues in the new mediumterm management plan described in“Management Policy” on page 1 with aview to maximizing the corporate valueof Amano Corporation.
The following business results are projected for the next fiscal year ending
March 31, 2019: net sales of ¥130,000
million, operating profit of ¥15,000 million, ordinary profit of ¥15,700 million,
and net income attributable to parent
company shareholders of ¥9,800 million. These projections assume currency
exchange rates of ¥105 to the US dollar and ¥130 to the euro.

high-quality products, ser vices andsolutions, thereby gaining large market
shares in each sphere of business inJapan, North America, Europe, and Asia,and developing its business globally.
In the year ended March 31, 2018, theTime Information System business accounted for 73.3% of total sales, and theEnvironment System business accounted
for 26.7%. Before the deduction of unallocated expenses, the Time Information
System business contributed 71.5% tooperating profit, while the Environment
System business contributed 28.5%. In
terms of weighted average sales overthe last five years, the Time Information
System business accounted for 72.8% of
total sales and 73.2% of operating profit.
One future risk factor is that if market
expansion is forecast for a businessactivity within the Time Information System business segment (which accounts
for a large proportion of the Group’sbusiness) for such reasons as a signifi-

Operating and Other Risk Factors
Matters relating to the qualitative information contained in these summary
financial statements and relating to theconsolidated financial statements that
could be envisaged as having a possible
material impact on investors are described below.
Every effort are made to identify factorsthat may now or in the future pose arisk to the undertaking of business by
the Amano Group, and these risk factors are then eliminated or otherwise
managed in the course of business.
Forward-looking statements are current
as of the date of the release of thesefinancial results (April 25, 2018).
(i) Impact on earnings due to changes inthe business environment

The Amano Group uses the unique
technologies and know-how it has accumulated to provide customers withcant change in the demand structure or
the creation of a new market, entities inother industries or other powerful competitors may be tempted to enter themarket. In such an event, if a competitor
were to enter with innovative products
or solutions that surpass Amano’s, theAmano Group’s market advantage
would decline, which may have a material impact on its business performance.
(ii) Fluctuations in exchange rates

The Group engages in business activities
on a global scale and has production
and sales bases overseas. In view of this,the Group’s business results may be
impacted by fluctuations in exchange
rates when the proceeds for overseas
transactions are converted into yen.
(iii) Information security

In the course of providing system solutions and developing cloud businessservices (e.g., ASP, SaaS, and hosting services), the Amano Group handles con-

Reference: Trend of cash flow indicators
As of Mar. 31, 2014

As of Mar. 31, 2015

As of Mar. 31, 2016

As of Mar. 31, 2017

As of Mar. 31, 2018

Equity ratio (%)

67.6

69.8

69.5

71.8

72.3

Fair value equity ratio (%)

66.5

83.7

99.4

122.6

150.1

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

37.3

52.2

25.5

16.0

11.2

Interest coverage ratio

219.7

122.9

292.2

447.8

483.5

Notes :	Equity ratio: Equity capital/Total assets
Fair value equity ratio: Gross market capitalization/Total assets
Ratio of cash flow to interest-bearing liabilities: Interest-bearing liabilities/Cash flow from operating activities
Interest coverage ratio: Cash flow from operating activities/Interest payments
Assumptions
		* All indicators are calculated on the basis of consolidated financial values.
		* Gross market capitalization is calculated by multiplying the closing price of the Company’s shares at the year-end by the number of shares of common stock issued and outstanding at the year-end (less treasury stock).
		* The term “cash flow from operating activities” refers to cash flow from operating activities posted under the consolidated statements of cash flows. The term “interest-bearing liabilities” refers to those liabilities stated in the consolidated balance sheets on
which interest is paid. Interest payments equate with the interest paid recorded in the consolidated statements of cash flows9fidential information, such as personal
information concerning, or provided by,customers. In view of this, the Company has strengthened and thoroughly
implemented security control measures
based on the Information Security
Management Rules. Specifically, theCompany has implemented measures
to protect confidential information (e.g.,encrypting hard disk drives and external
media) as well as provided periodic staff
training through e-learning. Furthermore,
the Company obtained the Privacy
Mark certification in February 2014 andhas implemented all possible measures
to ensure information security, including
supervision of service providers andthorough compliance with internal rules.
Never theless, the occurrence of an
unforeseen situation that results in loss
or leakage of confidential or personal
information as described above could
have an adverse material impact on theGroup’s business performance due tofactors such as loss of confidence.

(v) Overseas business development

The Amano Group has been developing its business globally in Japan, North
America, Europe, and Asia. Therefore,
there is a possibility that a situation
may arise in which business operations
are disrupted due to the applicationof unique laws, ordinances, or regulations or social disorder due to political
disturbances, war, or terrorism, etc. in
countries or regions where the Group
conducts business, which may adversely
impact the Group’s business performance.

(iv) Natural disasters

Natural disaster s (e.g., large-scale
ear thquakes, windstorms, or floods)
may damage human lives or property.
The Amano Group continues to takenecessary measures at ordinary times
comprising: 1) imposition of requirement for employees to carry a disasteremergency contact card at all times; 2)development of emergency contact
networks and personnel safety checksystem; 3) relocation of file servers toexternal data centers; 4) developmentof a preparedness for setting up the disaster management headquarters at thetime an emergency occurs. However,in the event of a natural disaster, theGroup may temporarily lose the ability
to continue to perform its operating
activities due to damage to its sales
business sites and production bases, orto employees experiencing difficulties incarrying out their duties.

10Topics
Orders for T&A systems remainstrong as Amano continues tosupport “Work Style Reform"!
Cleaning Robots attracting attention
due to labor shortage

Parking systems;
Trial operation for ETC card
settlement!
Business Domain Expansion in the
US market

which can be considered as a gesture ofwarm hospitality. In addition to the conventional self-parking systems, AMI has
expanded its business domain by entering
into this business.

”Work Style Reform” initiatives to copewith labor shortage and to improve productivity are progressing in many companies in Japan. In view of regulatory compliance and CSR, orders are firm from small
to medium sized enterprises (SMEs), for
TimePro-VG and TimePro-NX to allocate
necessary personnel for improved efficiency.
The market for T&A systems is expanding due to renewal demand for compliant
T&A terminals and the growing needs for
T&A management using timecards foreducational personnel.
In addition, for the janitorial-sanitation (jansan) related companies, which are sufferingfrom acute labor shortage, negotiations
for cleaning robots are increasing together
with T&A systems.
In order to comprehensively improve thework environment of our customers, wewill continue to promote multiple solutions(3-in-1 proposals).

Amid the growing interest regarding theuse of the ETC (Electronic Toll Collection)system other highways, experimental trials
are being conducted jointly with industry
related companies. Amano conducted a
trial operation at a parking lot of a large
shopping mall in January through to February this year. By enabling parking fee
settlement using the ETC system, ticketlessparking will be possible, which will shorten
entry and exit times. In addition, by collaborating with commercial facilities, theemergence of new services can also be
expected.
Overseas, this February, Amano McGann
Inc., which is subsidiar y in the UnitedStates, acquired the Valet parking management system business from Service Tracking Systems, Inc., based in California.
Valet parking is a popular chargeable parking method at Hotels and Casinos acrossthe United States where the driver, upon
arrival, entrusts the vehicle to the valet
parking attendant at the entrance andreceives it when leaving. This acquired business developed a valet parking system thatenables accurate and smooth operations,Company that cares about thehealth of employees
Certified as a "White 500" company!

11

Following last year’s Yokohama health management certification, this February, Amano
Corporation was certified as “Health Management Superior Corporation 2018 –White 500”.
Under this program, with the cooperation of
the health insurance associations, large enterprises practicing superior health management
are certified by the Ministry of Economy,
Trade and Industry (METI) and the Japan
Health Conference.The Amano Corporation,in accordance with the founder’s philosophy,“Enterprises are made of people”, has placed
hard and steady efforts towards “health management”.
Amano will continue to proactively promote“health management” with the aim of becoming a company where employees canwork vividly, by prioritizing both the physicaland mental health of employees.

Amano USA Holdings, Inc.
Amano Cincinnati, Inc.
Amano Cincinnati, Inc. is preparing to launch thelatest addition to our data collection terminal line.
This new series of terminals will include Wi-Fi as acommunication option. This will facilitate many small
business requirements as wired communications andIT services for small business is limited. This development comes from listening to our customer requirements and addressing theneed. The launch is plannedfor early 3rd quarter andwill be released with an
updated version of Time
Guardian software.
ACI has a renewed focus on the OATS compliant
market and TS-3000i time stamp. We have noticed
many changes in the IT infrastructure, related tosecurity, for large trading firms and financial institutions. As security concerns continue to be a major
focus, these firms look to Amano to keep up withchanging requirements. ACI is preparing to release
its latest version time stamp incorporating security
features that meet the challenging IT requirements.
This release is scheduled forthe 3rd quarter. The featuresof this new unit will allow us toapproach customers that haveupgraded their infrastructure
and are no longer compliant.
Recent changes to the ACI management team include Mr. Hiro Yamagishi returning to Japan after
serving as president of ACI for 3 years. During his
tenure, Mr. Yamagishi was instrumental in getting
many new products released. He was also a driving
force in reducing costs in our factory which was critical in our very competitive time clock and systems
market. Mr. Yoshi Kawahara will be replacing Mr.
Yamagishi as President of ACI. Mr. Kawahara will belocated in the Ohio factory. The transition is scheduled for May 2018.

Accu-Time Systems, Inc.
Accu-Time Systems, Inc. (ATS) continued the development of our Peoplepoint products with enhanced
functionality. Market response to the new functionality has accelerated with a 19% increase in Peoplepoint terminal sales in 2017. Acceptance continues
to grow with a major Value Added Reseller (VAR)
adopting an Android version of the Peoplepoint
terminal as their Employee Self Service terminal of
choice. Major retail customers have also chosen the
Peoplepoint terminal as their time data collectionand employee self-service terminal. The PeoplePoint Premium®, a 10.1 inch terminal which offers
a new level of interaction for employee self-service
applications began shipping in 2017 to a major international hotel and resort organization. The 10.1 inch
wide touch-screen display makes it easy to navigate
schedules, view accruals and enforce attestation.
The terminal can also deliver training videos, support
video chats, and display other web-based content.
These capabilities are delivered through PeoplePoint
Premium’s rich graphics, speakers and camera.
ATS’ TimeCom business continued growth with a
26% increase in revenue from the sale of terminals
and related professional services. The TimeComsolution includes a Maximus or Peoplepoint terminal,a monthly Software-as-a-Service subscription andprofessional services. The solution allows our enduser customers to link remote terminals to theirenterprise resource planning (ERP), human capitalmanagement (HCM) and workforce management
solutions. The heart of the solution is the ATS TimeCom cloud middleware that serves as a communication link between the terminal and the customer’ssystem. The TimeCom solution offers enhanced
security to protect all potentially sensitive data. An
independent third party security company performed
extensive penetration testing during 2017 to validate
the enhanced security of the TimeCom solution.
Currently, the TimeCom solution allows end-user
customers of Workday, an on-demand financial
management and human capital management software vendor, to implement a secure cloud based
communication with the ATS terminals in 90 daysor less. The flexible solution allows the end-user toselect the functionality that meets their requirements
various operating systems including the Ipv4 and Ipv6
internet protocols. The flexibility and ease of implementation has gained wide acceptance in a variety
of industries and market segments including higher
education, hospitality, pharmaceutical, retail, waste
management, finance and gaming.
The TimeCom solution received its validated status
by Oracle, a global ERP organization, in 2017. The
Oracle validation demonstrates ATS’ commitment
to expand its cloud based offerings. The validated
solution, consisting of a full integration of ATS’ TimeCom solution with the Oracle HCM Cloud Timeand Labor application, opened the market segment
for Oracle customers seeking a solution with theirOracle application. Similar to the Workday solution,ATS’ Oracle solution includes a monthly recurring
subscription-based, Cloud-based Software-as-aService solution and our PeoplePoint terminals. Thissolution will now be available to Oracle’s customer
base through their market place and ATS’ direct
sales activities.

12

ATS also opened a new Tech Center housing its
hardware and software engineering teams. This new
installation will continue to support ATS’ productinnovation and enhance collaboration among both
hardware and software teams.

Amano McGann, Inc.
Preparing for the Future
Tom Benton, who has been running APEC since2010, assumed the role of President and CEO of
Amano McGann, Inc. in April of 2017. While the executive team has been working on an updated strategy for the future, an interim plan has been put inplace calling for a focus on product, customer service
and support, and financial controls and reporting.
The team made numerous structural changes, including the addition of a new CFO, Jim Kinahan.
2017 was a challenging and enduring year for Amano
McGann, Inc. AMI placed strenuous efforts in adopting new processes, improve software performanceand to close out a large backlog of unfinished fieldinstallation projects. But unfortunately, AMI fell shortof its goal and continues to struggle well into 2018.
This has necessitated additional stronger measures,
which include organizational restructuring and business reforms. For AMI this is yet another challenge,but on the other hand, it is also an opportunity totruly rejuvenate AMI into a lean & mean organization capable of sustaining growth into the future andsecuring its position as the premier PARCS provider.

Amano McGann Acquires CVPSIn February of 2018, Amano McGann, Inc. acquired
substantially all of Computer Valet Parking Systems(CVPS), formerly a division of Service Tracking Systems, Inc. Known for exceptional, dedicated employees, paired with quality products that bolster revenue
and customer satisfaction for their clients, CVPS wasa pioneer in the electronic valet parking industry over
20 years ago. As the current market-leader, CVPS
will enable Amano McGann to expand and enhancetheir capabilities, markets, technological capacity andcustomer service.

Canadian Market Expansion
IFrontier Technologies
In the summer of 2017, Frontier Technologies signed
a contract to become the official dealer and service
provider of Amano McGann parking and security solutions. The new ally in the north now provides services to the eastern coast of Canada including Nova
Scotia, New Brunswick, Prince Edward Island and
Newfoundland. Through this partnership, Amano
McGann will further their goal of meeting the needsof the Canadian market with incomparable supportand innovative solutions.
Synerion North America
Amano McGann Canada and Synerion North America formed a partnership to offer Amano McGann
Security solutions throughout Canada. This partnership, formed in November of 2017, combine Synerion’s over 30 years of experience and customercentric approach with Amano Security’s wide rangeof products to meet the access control needs in the
Canadian market.

Keeping Up with The Carolinas
In an effort to provide North and South Carolina
with exceptional installation, support, and postinstallation service, Amano McGann opened a new
office in Charlotte, North Carolina and another office is slated to open in Raleigh, North Carolina in
June of 2018. Both Branch Offices include sales andoperations teams as well as a factory-trained teamof software and hardware technicians. The Carolina
offices are led by Greg
Brewer, a 15-year veteran of
the parking industry working directly with Amano
McGann products. Greg
supports branch operations
to achieve greater successwhile continuing to improvecustomer satisfaction acrossthe Southeast.

Major Project Awards
Irvine Towers
A development of The Irvine Company in Irvine,
California, Irvine Towers consists of over one million square feet of workspace spanning five towers
in Irvine, California. The property features innovative office space paired with hotel, retail, and green
space. Irvine Towers has three parking structures andthree surface lots to accommodate a variety of tenant and transient parking patrons. Expedited ingressand egress is facilitated through the integration ofAutomatic Vehicle Identification (AVI) readers thatare specifically calibrated to the Irvine Company’s
format for compatibility across the property portfolio. Additionally, Irvine Towers will take advantage of
Amano McGann’s extensive validation solutions via
eParcSuite®, a web-based solution that allows Irvine

Towers parking management to create online validations for reduced-fee or free parking.
Misericordia Health Centre
In June of 2017, Amano McGann Canada installed
the first Overture® system in Canada at the Misericordia Health Centre in Winnipeg, Manitoba. The
PARCS system was installed in the visitor parkade.
The Overture Series was chosen because it is an efficient, automated parking management solution thatutilizes linear barcode technology and offers a sleek,
attractive aesthetic to Misericordia Health Centre’s
new garage. Entry, exit, and pay-on-foot stations
accept EMV credit card payment including Point toPoint Encryption (P2PE) which enhances payment
security on the site while significantly reducing the
Payment Application Data Security Standard (PADSS) scope for the site.

Amano Pioneer Eclipse Corporation
Amano Pioneer Eclipse Corporation (APEC), which
manufactures and sells products under the Pioneer
Eclipse, American Sanders and Amano Environmental Americas brands, finished the year behind its total
sales plan due to soft sales in its cleaning markets.
Results were positive in other segments of the business, where the tool rental channel surpassed plan
by 7%, international sales of wood floor equipment
exceeded plan by 69%, and sales into Latin andSouth America surpassed plan by 15%.
Pioneer Eclipse (PE) remained active with new
product development in 2017 by launching three
new floor care coatings and a new sanitation line of
39 new chemical products. This chemical productdevelopment further enhances Pioneer Eclipse’s
position as a leader in floor
care coatings and serves toaccelerate growth in thegeneral cleaning chemical
categories.
The Pioneer Eclipse floor care machine line also
expanded in 2017 with the addition of dust control
models for the 225BU corded burnisher line, as well
as a two-speed corded floor polisher. These newmachines, along with new safety features and accessories for our propane line, help solidify PE as theleader in burnishing technology.
The American Sanders (AS) brandexperienced another year of strong
sales in the wood floor business,growing 4% in 2017. The ASbrand launched the Epoch, a new
16” rotary sander that is proving
to be one of the most versatile
sanding machines on the market.
The Epoch features a two-speed
high-torque motor and adjustablesanding pressure. These functions, combined with
the HydraSand multi-disc sanding head, make this13

machine highly capable in a variety of applications.
The machine is receiving high acclaim for its ability tosmooth an uneven floor and its finesse to provide aswirl-free surface ready for a high-quality finish. Initialsales far exceeded launch projections by 67%, contributing nearly $1M revenue in less than 6 months.
Continued efforts to strengthen the distribution network for the Amano Environmental Americas (AEA)
business has proven successful, resulting in growth of
65% in the small mist collector category. Sales of custom dust collection units on large industrial projects
slowed in 2017 as manufacturers delayed factory
construction projects.
In February 2018 APEC’s operational infrastructure
was improved with the implementation of Oracle’s
JD Edwards (JDE) enterprise business software solution. Implementation extends into the current year,
but is already demonstrating benefits for streamlining
manufacturing operations, improved visibility andtracking of inventory, and increased efficiency inorder fulfillment. To complement the JDE system,
warehousing procedure of finished products wastransformed to a “first in-first out” inventory system
to further improve inventory management and profitability.

Amano Europe Holdings, N.V.
Amano Europe, N.V.
Amano Europe continued to grow both revenue andprofit in the main business segments; parking solutions and time and attendance.
The X-Parc parking solution has been installed successfully worldwide in a variety of business segments
like airports, hotels, hospitals, retail, leisure andmunicipalities. With X-Parc Amano offers a reliable,
flexible and network centric parking solution thatcomplies with modern needs in parking and mobility
industry. We welcomed new partnerships and opportunities in Africa and in the Middle East like forexample Riyadh airport. With the X-Parc SMART
solution Amano offers cloud services like inn-app
payment solutions, advanced recognition services
and flexible tariff calculations. X-Parc SMART line
is also the entry point to SMART-CITY solutions.
Understanding the customer needs and guiding themnot only in pre- but also after sales is the key to our
success.

Astrow Cloud, the next generation of the proven
T&A software solution for small and medium sizedbusinesses with an installed base of more than 5.000
customers in Europe and Africa, is getting widely accepted. As a result we passed the threshold of 1 million bookings per month in 2017 and we could install
the cloud solution in South Africa for one company
with more than 2000 employees. We successfullylaunched the replacement of iT-300 terminal; ST25 with touch screen and extended functionality andAstrow V7.0 with business intelligence. 2017 was also
the year in which we launched mobility solutions. In
one of the major cities in Belgium, Gent, we started
to offer a solutionthat organizes andschedules transportation of employees
between their home
and the company.

Amano Time & Parking Spain S.A.
During the year 2017, ATPS realized several X-parc
installations which required specific software integration. These challenging experiences opened up a
new horizon for us. In collaboration with “CBL Informatica”, our most important partner and a leading
supplier of software for Truck Parking management,
we have successfully entered a new sector, which
also enables us to contact with future potential clients.
Among others, Mercagranada, a large wholesalemarket situated in Granada, a historic Andalusian city,
should be first mentioned as a successful example.
We installed here X-parc machines with a special
adaptation in combination with CBL software, whichenables a wider range of tariff calculation and othercomplex requirements of our client. Now our machines, including one that has a double height, areworking in three lanes allowing a smooth flow ofhundreds of incoming and outgoing 3 meters hightrucks, loaded with vegetables, fruits and seafoods.
Andamur Pamplona is also a fine example whichhighlighted our excellent triangle collaboration
among ATPS, CBL and Amano Europe. In this project we realized a new method of communication by
WebSercvice between Amano and CBL’s different
equipments. This means we can offer a software
solution to our clients as an initial stage, leaving a
hardware investment on entry and exit machines asa later stage.
With these new experiences ATPS is also in a newstage ready for future growth.

Horoquartz,S.A.
Horoquartz observed a strong growth in its corebusiness of workforce management solutions,consolidated its business in the main markets segments such as manufacturing and public sector andentered into new segments. In the retail sector, ourworkforce management solution eTemptation waschosen by one of the world’s leading retailers. Many
local authorities have also trusted Horoquartz like e.g.
the city of Lyon, the second largest local authority
in France, with 9000 employees. eTemptation has
also been successfully deployed by the French Blood
Establishment, confirming that the solution can also
meet the needs of healthcare facilities. The seamlessintegration of time management, scheduling optimization and activity tracking features is an essential
decision-making factor for these customers. At thesame time, Horoquartz reinforced its competitive
positioning in the small and medium sized businesses
market by having a dedicated sales team allocatedto this segment. The Process4people solution was
launched in March 2017. This solution is designed
to automate HR related processes by the use of acustomizable HR Portal. In June, more than 320 customers were able to discover the new eTemptation
5.4 version which offers a completely renewed user
experience. The eTemptation User Group reachedmore than 170 members, making it the biggest user
club in France in this area.
The Safety and Security division of Horoquartz
started to consolidate its organization by completingits sales and technical teams across the country. Major industrial groups, such as Alstom, Safran, Areva,
Goodyear, Merck have deployed our Protecsys 2
Suite solution both in France and abroad. In addition
to its access control solutions, Horoquartz has developed partnerships with leading specialists (Honeywell,
Milestone…) to offer a comprehensive solution also
including video surveillance or intrusion detection
features.
Customers are increasingly delegating the maintenance of their solutions to Horoquartrz in order torefocus on their core business. Thus, Horoquartz
experienced a significant increase in service contract
subscriptions, particularly in the field of Third Party
Application Maintenance.

14

Horoquartz recruited 100 new employees in 2017
to cope with the growth of its activities and set up
HQ Academy, a dedicated training center intended
to facilitate the integration of new talents into thecompany and guarantee the best level of skills to thecustomers.

Amano Malaysia Sdn. Bhd.
Expanding MS business in Malaysia
Besides having No. 1 Parking System Installations in
Malaysia, Amano Malaysia (AM) has increased thenumber of parking operation sites and currently
operating 14 sites of car parks throughout Malaysia.
This growing business has made AM’s foundationmuch stronger and contributed for the history highsales and profit in 2017.
One of our success in 2017 is the car park operation
at Mydin. Mydin is the largest local hypermarket chain
in Malaysia with total 78 outlets. Since late 2017, AM
has been operating 5 sites of Mydin malls in Subang
Jaya, Ipoh, Melaka, Senawang and Gong Badak. For
operating car park facilities in the Mydin malls, wehave allocated total 36 staff and invested the equipment of 22 entry stations, 22 exit stations, and 23
Automatic Pay Stations.
Together with 5 Mydin’s car park facilities, AM’s carpark operations have been expanded to all major
cities in Malaysia Peninsular. As demonstrated by thispositive growth, AM’s vision to be the No. 1 Car
Park Operator in Malaysia by 2022 can be attained.

Amano Korea Corporation(2) Intelligent LED lighting control system

International Security Exhibition & Conference
AKC exhibited its products at the “World Security
EXPO SECON 2018” held in Korea from 14th to
16th March, 2018. SECON is the largest International
Security Exhibition & Conference in Asia, which isheld every year. This year there were 46,324 visitors
and among the 433 exhibiting companies, AKC wasonly company from the parking industry. More than
3,000 people visited AKC’s booth where the stateof-the-art parking systems were displayed.
Construction companies, general trading companies,
and municipalities, etc., showed great interest in LPR(License Plate Recognition) systems with built-in
EV (Electric Vehicle) charging capabilities along withparking control systems, parking guidance system,
and centralized call centers. As such, there are many
new negotiations in progress after the exhibition.
This exhibition has greatly contributed greatly to
AKC’s brand strategy which professes “Overwhelming
No. 1 company” in the Korean parking industry.

Lights on during vehicle movement

Lights dim when no Vehicle Movemen

Using cameras, this system detects the motion ofpeople and vehicles and automatically lights up thepredicted forward direction. The lights then turn off
once the moving object has passed. By eliminating
unnecessary lighting this system is an energy-saver.
In addition, the system uses wireless transmission
for lighting control signals enabling great savings on
installation and maintenance costs.
(3) Web / Mobile systems

A view of AKC’s booth

Main Products that were Displayed(1) Parking system with a built-in quick charger forelectric vehiclest
With the collaboration of SignetEV, a world-classcompany with top share in EV quick chargers, AKC
developed a LPR system with a built-in multiple highoutput quick charger. The system is capable of quick
charging up to 4 vehicles per unit, and also capableof settling parking and charging fees simultaneously.

AKC is providing a service that connects parking
facilities and parking users through mobile digital
devices such as smartphones and tablets. AKC is collaborating with Kakao Corporation, which is a leading
Korean company providing SNS services. The photoshows an example of screens corresponding tovarious inquiries such as purchasing seasonal passes,
information regarding newly opened parking lots anddiscounts, parking lot locations and parking fees etc.
(4) Centralized Call Center

The 24-hour Centralized Control (Call) Center responds to customer complaints and handles system
malfunctions. The sites are monitored real-time via
cameras and through remote control, most malfunctions can be resolved. The use of this control center

15

enables the reduction of on-site staffing and is contributing to systems sales together with the expansion of Management Service sites.

AMANO Corporation and Subsidiaries

Financial Highlights
For the year ended March 31, 2018
Yen in millions and U.S.dollars in thousands, except per share amounts- See Note 4 to the Consolidated Financial Statements.
Thousands of U.S.dollars(Note 4)

Millions of Yen

2018

2017

2018

Net sales...................................................................

¥124,405¥120,124$1,173,636

Net income................................................................

10,0199,223

94,526

Net income per share (Basic)......................................

¥132.12¥120.79$1.246

Cash dividends per common share..............................

57.00

52.00

0.538

Total assets...............................................................

¥145,446¥137,888$1,372,140

Working capital.........................................................

59,53355,404

561,634

Total net assets..........................................................

105,634

99,421

996,553

Time information systems..........................................

¥26,759¥24,789$252,452

Time management equipment ...................................

3,751

3,818

35,391

Parking systems ........................................................

60,75758,402

573,182

Environmental systems .............................................

21,993

21,712

207,485

Cleaning systems ......................................................

11,143

11,401

105,127

For the years ended March 31:

Per share data (Yen and U.S. Dollars):

At March 31:

Sales by product:

Note: U.S. dollar amounts have been translated at the rate of ¥106 = US $1, the rate prevailing on March 31, 2018.
- See Note 4 to the Consolidated Financial Statements.

Net Sales

Net Income

Net Income Per Share(Millions of Yen)

(Millions of Yen)

(Yen)

13000011000

14012000010000

110000

8000

90000
80000

7000

70000

6000

60000

5000

50000

100
80
60

4000

40000

40

3000

30000

2000

20000

20

1000

10000
0

120

9000

100000

'14

'15

'16

'17

'18

0

'14

'15

'16

16

'17

'18

0

'14

'15

'16

'17

'18

AMANO Corporation and Subsidiaries

Consolidated Balance Sheet
As at March 31, 2018
Thousands of U.S.dollars(Note 4)

Millions of Yen

ASSETS

2018

2017

2018

Cash and bank deposits (Notes 6, 12 and 15)..............

¥44,525¥38,940$420,049

Marketable securities (Note 15)..................................

1,377

1,435

13,00033,632

33,710317,290

Current assets:

Notes and accounts receivable:
Trade (Notes 7 and 15) ........................................
Less allowance for doubtful accounts ....................

(467)

(357)

(4,412)

33,16533,353

312,879

3,699

3,753

34,897

Inventories:
Merchandise and finished goods ............................
Work in process ...................................................

535

477

5,048

Raw materials and supplies ...................................

5,495

5,227

51,843

Deferred tax assets (Note 17)......................................

1,838

1,889

17,345

Other current assets ..................................................

3,267

2,560

30,823

Total current assets ...............................................

93,903

87,638885,884

Buildings and structures ............................................

30,88730,166291,393

Machinery and equipment .........................................

20,883

19,768

197,013

Leased assets (Note 14)..............................................

6,112

6,330

57,66657,88356,264

546,072

Less accumulated depreciation ..........................

(41,216)(40,029)(388,834)

16,667

16,235

157,238

7,135

7,125

67,313

Property, plant and equipment, at cost:

Land ........................................................................
Construction in progress ............................................

177

327

1,679

Total property, plant and equipment ......................

23,98023,689226,230

Goodwill ..................................................................

2,895

3,165

27,318

Software ...................................................................

4,385

3,322

41,377

Software in progress ..................................................

2,261

2,989

21,336

Other intangible fixed assets ......................................

2,824

3,013

26,645

Total intangible fixed assets ..................................

12,367

12,490116,676

Intangible fixed assets :Investments and other assets:
Investments in unconsolidated subsidiaries and affiliates(Notes 5 and 15) .......................................................

1,787

1,710

16,863

Investments in securities (Note 15).............................

7,629

6,376

71,977

Leasehold and guarantee deposits ..............................

1,287

1,142

12,147

Deferred tax assets (Note 17)......................................

938

1,273

8,855

Other assets ..............................................................

4,094

3,995

38,625Less allowance for doubtful accounts .........................

(542)

(428)

(5,117)

Total investments and other assets ........................

15,195

14,070143,350

Total assets............................................................................

¥145,446¥137,888$1,372,140

17

Thousands of U.S.dollars(Note 4)

Millions of Yen

LIABILITIES AND NET ASSETS

2018

2017

2018

Current liabilities:
Trade notes and accounts payable (Note 15)...............
Electronically recorded monetary claims (Note 15)......
Short-term bank loans ...............................................
Lease obligations (Notes 14 and 15) ...........................
Accrued bonuses for employees .................................
Accrued bonuses for directors ....................................
Accrued income taxes ...............................................
Other current liabilities ..............................................
Total current liabilities ..........................................

¥7,034
6,454
169
1,296
2,477
130
3,472
13,33534,370¥7,629
6,580
37
1,391
2,204
90
2,581
11,71932,234$66,360
60,891
1,598
12,23623,372
1,226
32,757
125,810324,249

Long-term liabilities:
Long-term loans payable (Note 15) ............................
Liability for retirement benefits (Note 16)..........................
Long-term accounts payable ......................................
Lease obligations (Notes 14 and 15) ...........................
Deferred tax liabilities (Note 17).................................
Asset retirement obligations ......................................
Other long-term liabilities...........................................
Total long-term liabilities ......................................
Total liabilities ......................................................

–
2,446
33
2,590
12
31
326
5,441
39,812

469
2,445
21
2,954
8
31
302
6,233
38,467–23,082
321
24,437
115
298
3,084
51,338375,587

18,23919,293
71,14018,23919,29365,075172,072
182,010
671,135(1,892)
106,780(1,059)101,548(17,850)
1,007,367

2,225(2,997)(917)(1,689)1,934(3,533)(986)(2,585)20,993(28,274)(8,660)(15,941)

Non-controlling interests in consolidated subsidiaries .....

543

458

5,127

Total net assets......................................................
Total liabilities and net assets ...............................................

105,634¥145,446

99,421¥137,888

996,553$1,372,140

Net assets (Notes 10 and 11):
Shareholders' equity:
Common stock
Authorized - 185,476,000 shares
Issued:March 31, 2018 and 2017 - 76,657,829 sharesin 2018 and 2017 ..............................................
Capital surplus .....................................................
Retained earnings .................................................
Treasury stock at cost, 923,903 shares in 2018
and 607,651 shares in 2017 .................................

Accumulated other comprehensive income:Net unrealized gains (losses) on other securities......
Foreign currency translation adjustments ...............
Retirement benefits liability adjustments ................

The accompanying notes are an integral part of these statements.

18

AMANO Corporation and Subsidiaries

Consolidated Statement of Income, andConsolidated Statement of Comprehensive Income
For the year ended March 31, 2018

Consolidated Statement of Income
Millions of Yen

Net sales
Cost of sales (Note 9) ...........................................................
Gross profit ..........................................................
Selling, general and administrative expenses (Notes 8 and 9).....
Operating income .................................................
Other income ( expenses ):Interest and dividend income .....................................
Interest expense ........................................................
Equity in earnings of affiliates ....................................
Foreign exchange gain (loss) .....................................
Gain on sale of fixed assets ........................................
Loss on disposal of fixed assets ..................................
Loss on sale of fixed assets ........................................
Gain on sale of investments in securities (Note 15)......
Loss on liquidation of subsidiaries..............................
Other, net .................................................................
Income before income taxes and non-controlling interests .......
Income taxes (Note 17):
Current .....................................................................
Deferred ...................................................................
Income before non-controlling interests .................
Non-controlling interests in net income of consolidated subsidiaries .....
Net income............................................................

Thousands of U.S.dollars(Note 4)

2018

2017

2018

¥124,405
69,10355,302
40,951
14,350¥120,124
68,18051,94338,778
13,165$1,173,636
651,918
521,718
386,336
135,382

288
(34)
108
(118)
8
(37)
(1)
250
–
465
15,280

238
(30)
71
(89)
3
(24)
(19)
100
(35)
452
13,831

2,724
(328)
1,027
(1,113)
80
(357)
(13)
2,366
–
4,390
144,158

4,953
209
10,117(97)¥10,019

4,490
26
9,314
(90)
¥9,223

46,733
1,977
95,447(922)$94,526

Consolidated Statement of Comprehensive Income
Millions of Yen

Income before non-controlling interests ................................

Thousands of U.S.dollars(Note 4)

2018

2017

2018

¥10,117¥9,314$95,447

Other comprehensive income (loss) (Note 13):
Net unrealized gains (losses) on other securities .........
Translation adjustments ............................................
Retirement benefits liability adjustments ....................
Share of other comprehensive income (loss) of companies
accounted for by the equity method.................................
Total other comprehensive income (loss) .................
Comprehensive income ........................................................

289
566
68

484
(1,219)
192

2,730
5,341
648

(0)
923
¥11,041(6)(549)¥8,765(4)
8,715$104,163

Total comprehensive income attributable to:Shareholders of the Company ....................................
Non-controlling interests ...........................................

¥10,915¥126¥8,681¥83$102,973$1,190

The accompanying notes are an integral part of these statements.

19

AMANO Corporation and Subsidiaries

Consolidated Statement of Changes in Net Assets
For the year ended March 31, 2018
Millions of Yen
Shareholders’ equity
Common stock

Capital surplus

Retained earnings

Balance at April 1, 2017
Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Net changes in items other than shareholders' equity
Total changes during the year

¥18,239¥19,293¥65,075––

Balance at March 31, 2017¥18,239¥19,293

Balance at April 1, 2017
Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Net changes in items other than shareholders' equity
Total changes during the year
Balance at March 31, 2018

(3,954)
10,019

6,065

(832)

5,232

¥71,140(¥1,892)¥106,780

Total net assets¥99,421

290
290

536
536

68
68

895
895

85
85

(3,954)
10,019
(832)
980
6,213

¥2,225(¥2,997)(¥917)(¥1,689)¥543¥105,634

Thousands of U.S. dollars (Note 4)
Shareholders’ equity
shareholdCapital surplus Retained earnings Treasury stock Totalers’ equity$182,010$613,916($9,996)$958,002

Balance at April 1, 2017
Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Net changes in items other than shareholders' equity
Total changes during the year

$172,072––

Balance at March 31, 2018

$172,072$182,010

Balance at March 31, 2018

(832)

(3,954)
10,019(832)

Accumulated other comprehensive income
Non-controllinginterests in
Net unrealized Foreign currency
Retirement
Total accumulated
gains (losses) on
translation
benefits liability other comprehensive consolidated
subsidiaries
other securities
adjustments
adjustments
income (loss)¥1,934(¥3,533)(¥986)(¥2,585)¥458

Common stock

Balance at April 1, 2017
Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Net changes in items other than shareholders' equity
Total changes during the year

Total shareholders’equity(¥1,059)¥101,548

Treasury stock(37,307)(37,307)

94,526(7,854)

94,526(7,854)57,218(7,854)49,365$671,135($17,850)$1,007,367

Accumulated other comprehensive income
Non-controllinginterests in
Net unrealized Foreign currency
Retirement
Total accumulated
gains (losses) on
translation
benefits liability other comprehensive consolidated
subsidiaries
other securities
adjustments
adjustments
income (loss)$18,254($33,334)($9,308)($24,388)$4,324

Total net assets$937,938(37,307)

2,739
2,739

5,060
5,060

648
648

8,447
8,447

803
803

94,526(7,854)
9,249
58,614$20,993($28,274)($8,660)($15,941)$5,127$996,553

20

Millions of Yen
Shareholders’ equity
Common stock

Capital surplus

Retained earnings

Treasury stock

Balance at April 1, 2016
Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Net changes in items other than shareholders' equity
Total changes during the year

¥18,239¥19,293¥59,757(¥56)

Total shareholders’equity¥97,233(1,002)(3,906)
9,223(1,002)

–

–

5,317

(1,002)

4,314

Balance at March 31, 2017¥18,239¥19,293¥65,075(¥1,059)¥101,548

Balance at April 1, 2016
Changes during the year
Dividends from surplus
Net income
Purchase of treasury stock
Net changes in items other than shareholders' equity
Total changes during the year
Balance at March 31, 2017

(3,906)
9,223

Accumulated other comprehensive income
Non-controllinginterests in
Net unrealized Foreign currency
Retirement
Total accumulated
consolidated
gains (losses) on
translation
benefits liability other comprehensubsidiaries
other securities
adjustments
adjustments
sive income (loss)¥1,456(¥2,321)(¥1,178)(¥2,043)
¥416

Total
net assets¥95,606478
478(1,212)(1,212)

192
192

(541)
(541)

42
42

(3,906)
9,223(1,002)
(499)
3,814

¥1,934(¥3,533)(¥986)(¥2,585)¥458¥99,421

The accompanying notes are an integral part of these statements.

21

AMANO Corporation and Subsidiaries

Consolidated Statement of Cash Flows
For the year ended March 31, 2018
Millions of Yen

Cash Flows from Operating Activities:
Income before income taxes and non-controlling interests ......
Depreciation and amortization ............................................
Amortization of goodwill ....................................................
Increase (decrease) in liability for retirement benefits ...............
Increase (decrease) in allowance for doubtful accounts ........
Interest and dividend income ..............................................
Equity in earnings of affiliates ............................................
Interest expenses ................................................................
Foreign currency translation (gain) loss ...............................
(Gain) loss on sale of fixed assets ........................................
Loss on disposal of fixed assets ...........................................
(Gain) loss on sale of investments in securities.....................
(Increase) decrease in trade notes and accounts receivable ...
(Increase) decrease in inventories ........................................
Increase (decrease) in trade notes and accounts payable........
Others ................................................................................
Subtotal .............................................................................
Interest and dividends received ...........................................
Interest paid .......................................................................
Income taxes paid ..............................................................
Income taxes refunded.........................................................
Net cash provided by operating activities ...............
Cash Flows from Investing Activities:
Payment for purchase of marketable securities ...........
Proceeds from redemption of marketable securities ............
Payment for purchase of property, plant and equipment ......
Proceeds from sale of property, plant and equipment ..........
Payment for acquisition of intangible assets ...............
Payment for acquisition of investments in securities ...........
Proceeds from sale of investments in securities ...........
Increase in time deposits ...........................................
Decrease in time deposits ..........................................
Payment for acquisition of investments in subsidiaries resulting in change
in scope of consolidation ......................................................
Proceeds from sale of investments in subsidiaries and affiliates ......
Payment for business acquisition ...............................
Collection of loans ....................................................
Others ......................................................................
Net cash used in investing activities ......................
Cash Flows from Financing Activities:
Proceeds from short-term bank loans .........................
Repayment of short-term bank loans ..........................
Payment for acquisition of treasury stock ...................
Repayments of finance lease obligations .....................
Proceeds from sale and leaseback ..............................
Dividends paid ..........................................................
Dividends paid to minority interests............................
Net cash used in financing activities ......................
Effect of exchange rate changes on cash and cash equivalents.......
Net increase (decrease) in cash and cash equivalents ..............
Cash and cash equivalents at beginning of year .......................
Cash and cash equivalents at end of year (Note 12)..................
The accompanying notes are an integral part of these statements.

22

Thousands of U.S.dollars(Note 4)

2018

2017

2018

¥15,280
5,063
511
66
206
(288)
(108)
34
4
(7)
37
(250)
290
(235)
(794)
739
20,550303(34)(4,141)73
16,750¥13,831
4,933
684
(225)
81
(238)
(71)
30
(27)
16
24
(100)
309
(813)
266
278
18,980266(30)(5,488)
6
13,734$144,158
47,767
4,824
625
1,949
(2,724)(1,027)
328
42
(68)
357
(2,366)
2,745(2,220)(7,496)
6,976
193,8712,865(327)(39,072)690
158,027(2,000)2,150(3,107)25(2,385)(967)
300(9,179)8,771(2,000)2,300(3,109)23(2,464)(108)
400(8,601)
9,011(18,868)
20,283(29,319)244(22,500)(9,124)
2,838(86,596)
82,754

–
46
(168)
0
10
(6,500)

(62)
–
–
3
(78)
(4,684)–441(1,586)
7
98(61,328)

158
(506)
(832)
(1,547)1,331(3,954)(41)(5,392)
103
4,961
35,270¥40,231–(1,195)(1,002)(1,713)
1,602(3,906)(41)(6,256)(248)
2,544
32,725¥35,270

1,493(4,781)(7,854)(14,596)
12,562(37,307)(387)(50,871)975
46,804
332,737$379,541

AMANO Corporation and Subsidiaries

Notes to the Consolidated Financial Statements
1. Basis of Consolidated
Financial Statements
The accompanying consolidated financial statements of AMANO Corporation [hereafter, "the Company"] andits subsidiaries have been preparedin accordance with the provisions
set forth in the Japanese Financial
Instruments and Exchange Act andits related accounting regulations inJapan. The accounts of the Company
and domestic subsidiaries includedin the consolidation are based on theaccounting records maintained in accordance with accounting principles
generally accepted in Japan, which
are different in certain respects as tothe application and the disclosure requirements of International Financial
Reporting Standards.
As permitted by the Financial Instruments and Exchange Act, amounts ofless than one million yen have beenrounded off. As a result, the totals
shown in the accompanying consolidated financial statements (both inyen and U.S. dollars) do not necessarily agree with the sums of the individual amounts.
Certain amounts in the prior year's
financial statements have been reclassified to conform to the current year's
presentation.

2. Principles of Consolidation(1) Scope of Consolidation
The Company had 26 consolidated
subsidiaries at March 31, 2018. The
accompanying consolidated financial
statements include the accounts of theCompany and those of its subsidiaries
that are controlled by the Company.
Under the control concept, major subsidiaries in which the Company is able
to exercise control over operations areto be fully consolidated.
HOROQUARTZ, S.A., a consolidated
subsidiary, implemented an absorptiontype merger with Horosmart, S.A., aconsolidated subsidiary,during theconsolidated fiscal year under review.
The accounts of the overseas consolidated subsidiaries are consolidated using their financial statements
as of their respective fiscal year end,
which falls on December 31, 2017 andnecessary adjustments are made totheir financial statements to reflect any
significant transactions from January
1 to March 31, 2018. All significant intercompany balances and transactions
have been eliminated in consolidation.

buildings acquired on or after April 1,
1998 and for facilities attached to buildings and structures acquired on or after April 1, 2016, which are computedon the straightline method. The rangesof the useful lives of assets are:
Buildings and structures 5-50 years
Machinery and vehicles 7-17 years
Normal repairs and maintenance,
including minor renewals and improvements, are charged to income as
incurred.

(2) Accounting for Investments in
Unconsolidated Subsidiaries
and Affiliates(4) Intangible Assets

None of the 3 unconsolidated subsidiaries are accounted for by the equity
method, because the effect of their net
income or losses and retained earnings
on the accompanying consolidated
financial statements is immaterial. The
affiliates accounted for by the equity
method are listed below:- Creo Co., Ltd.

3. Summary of Significant
Accounting Policies(1) Cash and Cash Equivalents
Cash and cash equivalents consist of
cash on hand, cash in banks which can
be withdrawn at any time and shortterm investments with a maturity of
three months or less when purchased
which can easily be converted to cash
and are subject to little risk of change invalue.

(2) Inventories
Inventories are stated at cost (writedown
due to reduced profitability). Cost is determined principally using the periodic
average method.

(3) Property, Plant andEquipment
Property, plant and equipment arestated at cost, less accumulated depreciation. Depreciation is computed on
the declining balance method, basedon the estimated useful lives, except for

23

Intangible assets are amortized using the straight-line method. Software
costs for internal use are amortizedby the straight-line method over their
expected useful lives (five years).
Software developed for external saleis amortized over the estimated sales
period, 3 years. Goodwill is amortizedover the estimated useful life, or where
the amount of goodwill is immaterial,is charged to income in the year of acquisition.

(5) Leased Assets
Leased assets in finance lease transactions not involving transfer of ownership are depreciated by the straightline method over the term of the lease,with a residual value of zero.

(6) A ccounting for Financial
Instruments(a) Derivatives
All derivatives are stated at their fairvalues, with changes in fair value
included in net profit or loss for theperiod in which they arise.
(b) Securities
Securities held by the Company andits subsidiaries are classified into four
categories;
Trading securities, which are held forthe purpose of generating profits on
short-term differences in prices, arestated at their fair values, with changes
in fair values included in net profit orloss for the period in which they arise.
Additionally, securities held in trusts

for trading purposes are accounted forin the same manner as trading securities. Held-to-maturity debt securities,
that the Company and its subsidiaries
have intent to hold to maturity, arestated at their costs after accounting
for any premium or discount on acquisition, which are amortized over theperiod to maturity.
Investments of the Company in equity
securities issued by unconsolidated
subsidiaries and affiliates are accounted for by the equity method. Exceptionally, investments in certain unconsolidated subsidiaries and affiliates arestated at cost because the effect of application of the equity method would
be immaterial.
Other securities for which market quotations are available are stated at fairvalue. Net unrealized gains or losseson these securities are reported as aseparate item in the net assets section
at a net-of-tax amount. Other securities for which market quotations areunavailable are stated at cost, except
as stated in the paragraph below.
In cases where the fair value of heldtomaturity debt securities, equity securities issued by unconsolidated subsidiaries and affiliates, or other securities
had declined significantly and such
impairment of the value is not deemed
temporary, those securities are written
down to the fair value and the resulting losses are included in net profit orloss for the period.

(7) Foreign Currency Translation
Foreign currency transactions aretranslated using foreign exchange rates
prevailing at the respective transaction dates. Receivables and payables
in foreign currencies are translated at
the foreign exchange rates prevailingat the respective balance sheet dates
and the resulting transaction gains orlosses are included in net profit or loss
for the period.

(8) Translation of Foreign
Currency Financial
Statements (Accounts ofOverseas Subsidiaries)
Foreign currency denominated statements of overseas consolidated subsidiaries have been translated into
Japanese yen using the method prescribed by the Business Accounting
Deliberation Council of Japan.
All the balance sheet accounts offoreign subsidiaries and affiliates aretranslated at the foreign exchange
rates prevailing at the respective balance sheet dates except for common
stock and capital surplus. On theother hand, all the profit and loss accounts are translated at the average
foreign exchange rates for the respective periods. Differences arising fromtranslation are presented as "Foreign
currency translation adjustments" and"Non-controlling interests in consolidated subsidiaries" in the accompanying consolidated financial statements.

(9) Income Taxes
The Company recognizes the tax effectof temporary differences between the
carrying amounts and the tax basisof assets and liabilities. The provision
for income taxes is computed basedon the pretax income included in the
consolidated statement of income. The
asset and liability approach is used torecognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences.

(10) Allowance for Doubtful
Accounts
In general, the Company and its subsidiaries provide the allowance basedon the past receivables loss experience
for a certain reference period. Furthermore, for receivables from companies
with financial difficulty, which could
affect the debtors' ability to performtheir obligations, the allowance isprovided for estimated unrecoverable
amounts individually.

24(11) Retirement Benefits
The Company and some of its subsidiaries recognize accrued pension andseverance costs to employees basedon the actuarial valuation of projected
benefit obligation and plan assets attheir value. The retirement benefit
obligation for employees is attributed
to each period by the benefit formula method. Prior service costs areamortized based on the straight-line
method over a period of ten years. Actuarial gains and losses are amortizedbased on the straight-line method overa period of ten years starting from the
beginning of the subsequent year.

(12) A ccrued Employees'
Bonuses
Accrued employees' bonuses at thebalance sheet date are based on an
estimate of the amounts to be paid asbonuses for services rendered by employees by that date.

(13) Accrued Directors' Bonuses
Accrued directors' bonuses at thebalance sheet date are based on an
estimate of the amounts to be paid asbonuses for servises rendered by directors by that date.

(14) R esearch and Development
Expenses
Research and development expenses
are charged to income as incurred.

(15) N et Income and Dividends
per Share
Basic net income per share is computed
based on the net income and theweighted average number of sharesof common stock outstanding during
each period. Diluted net income pershare is computed based on the net
income available for distribution to
the shareholders and the weightedaverage numbers of shares of common stock outstanding during eachyear after giving effect to the dilutive
potential of shares of common stockto be issued upon the exercise of stock
subscription rights and stock options.
Cash dividends per share shown foreach fiscal period in the accompanying consolidated statement of income
represent actual dividends declared as
applicable to a common stock during
the respective fiscal period.

(16) Revenue from Construction
Contracts
Revenues and costs of construction
contracts are recognized by the percentage-ofcompletion method in casethe percentage of completion for eachcontract can be reliably estimated. The
percentage of completion is measured by
the percentage of total costs incurred
to date to estimated total costs foreach contract. The completed-contract
method is applied to the contracts incase the percentage of completion cannot be reliably estimated.

(17) Accounting for Consumption
Taxes
Transactions subject to consumption
taxes are recorded at amounts exclusive of consumption taxes.

(18) Additional Information
For the purpose of enhancing the motivation to contribute the improvementof medium to long-term business performance and to increase the corporate
value,Amano Corporation and someof its subsidiaries have introduced theCompensation BIP Trust system fordirectors (excluding external directors
and directors residing overseas) andoperating officers (excluding officers
residing overseas), as well as the Employee Stock Ownership Plan (J-ESOP)system for employees who meet theprescribed requirements.
(a) Outline of the system
Under the system, a trust is establishedwith funds contributed by Amano
Corporation. Stocks of Amano Corporation are acquired by the trust and to
be provided to eligible persons. Under

the Directors' Compensation BIP Trust,in accordance with the stock distribution rules and based on points granted
according to their positions and theattainment level of numerical targetsof performance indicators,stocks of
Amano Corporation are provided by
the trust to directors and operating
officers. Under the Employee Stock
Ownership Plan (J-ESOP), in accordance with the stock distribution rules
and based on points granted according
to their positions and operating performance, stocks of Amano Corporation
are provided by the trust to employees
who meet the prescribed requirements.
(b) Stocks of Amano Corporation thatremain in the trust
Stocks of Amano Corporation thatremain in the trust are recorded astreasury stock in the net assets section
with the book value of the trust (excluding incidental expenses). The bookvalue and the numbers of the treasury
stock at March 31,2018 are ¥827 million and 314,300 shares,respectively.

4. United States Dollar Amounts
The Company maintains its accounting
records in Japanese yen. The U.S. dollar amounts included in the consolidated financial statements and notes
thereto represent the arithmetical results of translating Japanese yen to U.S.
dollars at a rate of ¥ 106= US$1, theapproximate effective rate of exchange
prevailing on March 31, 2018. The inclusion of U.S. dollar amounts is solely
for convenience of readers outside
Japanand is not intended to imply thatyen amounts could be converted, realized, or settled in U.S. dollars at that,or any other rate.

25

5. Investments in Unconsolidated Subsidiaries and Affiliates
Among investments in securities, the amount in aggregate corresponding to unconsolidated subsidiaries and affiliates at
March 31, 2018 and 2017 is as follows:
Millions of Yen

Investments in equity securities
Others2018¥1,73353

Thousands of U.S.dollars ( Note 4 )2017¥1,65653

2018$16,349500

6. Assets Pledged as Collateral and Obligations Secured by Collateral
As at March 31, 2018 and 2017, the following assets were pledged as collateral:
Millions of Yen

Cash and bank deposits

2018
¥9

Thousands of U.S.dollars ( Note 4 )

2017
¥65

2018
$85

7. Notes and Accounts Receivable
The Company recognizes settlements of trade notes receivable when the banks actually clear the notes.
As March 31, 2018 was a holiday for financial institutions, the following account includes the unsettled balance of tradenotes receivable due on that date in the accompanying consolidated balance sheet as of March 31, 2018.
Millions of Yen

Trade notes receivable

2018
¥380

Thousands of U.S.dollars ( Note 4 )

2017
–

2018
$3,585

8. Selling, General and Administrative Expenses
Selling, general and administrative expenses during the years ended March 31, 2018 and 2017 principally include:
Millions of Yen

Employees' bonuses
Directors' bonuses
Retirement benefits
Salaries and allowances
Allowance for doubtful accounts

2018¥1,705130
1,148
17,741306

2017¥1,51468
1,133
16,842
129

Thousands of U.S.dollars ( Note 4 )2018$16,085
1,226
10,830167,368
2,887

9. Research and Development Costs
Research and development costs included in selling, general and administrative expenses and manufacturing cost for the years
ended March 31, 2018 and 2017 are as follows:
Millions of Yen

Research and development costs

2018¥1,3252017¥1,331

26

Thousands of U.S.dollars ( Note 4 )2018$12,500

10. Changes in Shareholders’ Equity
Changes in “Shares issued and outstanding” and “Shares of treasury stock” during the period from April 1, 2017 to March 31,2018 are as follows:(1) Shares issued and outstanding
Share type
Common stock (shares)

As of April 1, 201776,657,829

Increase

Decrease––(2) Shares of treasury stock
Share type
As of April 1, 2017
Increase
Decrease
Common stock (shares)
607,651
316,252–(Reason of change)
The increase in the number of shares is due to the purchases of 1,952 shares less than one unit.
The increase in the number of shares is due to acquisitions of 164,900 shares by Directors’ Compensation BIP Trust.
The increase in the number of shares is due to acquisitions of 149,400 shares by Employee Stock Ownership Plan (J-ESOP).

As of March 31, 201876,657,829

As of March 31, 2018
923,903

Changes in “Shares issued and outstanding” and “Shares of treasury stock” during the period from April 1, 2016 to March 31, 2017 are as follows:(1) Shares issued and outstanding
Share type
As of April 1, 2016
Increase
Decrease
As of March 31, 2017
Common stock (shares)
76,657,829––
76,657,829(2) Shares of treasury stock
Share type
As of April 1, 2016
Increase
Decrease
As of March 31, 2017
Common stock (shares)
68,109539,542–
607,651(Reason of change)
The increase in the number of shares is due to the purchases of 1,642 shares less than one unit and purchases of 537,900 shares by a resolution of the Board of
Directors meeting held on October 28, 2016.

11. Dividends
Information on dividends for the fiscal year ended March 31, 2018 is as follows:(1) Dividends paid
Resolution

Share type

Total dividend Total dividend Dividend per share Dividend per share Date of record(Millions of Yen) (Thousands of U.S.dollars)(Yen)(U.S.dollars)

Effective dateOrdinary general meeting of shareholders, Common stock¥2,205$20,806¥29$0.274 March 31, 2017 June 30, 2017
June 29, 2017
Board of directors meeting,30, December 4,
Common stock¥1,749$16,501¥23$0.217 “September
October 27, 2017
2017”
2017
(NOTES)“Total dividend” as determined by the Board of Directors’ resolution on October 27, 2017 includes ¥ 3 million for dividends on the Company’s shares owned by
Directors’ Compensation BIP Trust and ¥ 3 million for dividends on our shares owned by Employee Stock Ownership Plan (J-ESOP).
(2) Dividends for which the date of record falls in the fiscal year, but the effective date is after the end of the fiscal year.
Date of
Dividend Total dividend Total dividend Dividend per share Dividend per share
Resolution
Share type
Effective datefunding(Yen)(U.S.dollars)(Millions of Yen) (Thousands of U.S.dollars)recordOrdinary general meeting of shareholders,CommonRetained¥2,585$24,387¥34$0.321March 31, 2018 June 29, 2018
June 28, 2018stock
earnings(NOTES)“Total dividend” as determined by the Ordinary general meeting of shareholders’ resolution on June 28, 2018 includes ¥ 5 million for dividends on the Company’s shares owned by Directors’ Compensation BIP Trust and ¥ 5 million for dividends on our shares owned by Employee Stock Ownership Plan (J-ESOP).
Information on dividends for the fiscal year ended March 31, 2017 is as follows:(1) Dividends paid
Total dividend
Resolution
Share type(Millions of Yen)
Ordinary general meeting of shareholders,Common stock¥2,144
June 29, 2016
Board of directors meeting,Common stock¥1,761
October 28, 2016

Dividend per share(Yen)

Date of record¥28

March 31, 2016

June 30, 2016¥23

September 30, 2016

December 2, 2016

(2) Dividends for which the date of record falls in the fiscal year, but the effective date is after the end of the fiscal year.
Total dividend Dividend per share
Dividend
Resolution
Share type
Date of record
funding(Yen)(Millions of Yen)
Ordinary general meeting of shareholders, Common stock Retained earnings¥2,205¥29
March 31, 2017
June 29, 201727

Effective date

Effective dateJune 30, 201712. Cash and Cash Equivalents
Reconciliations of cash and cash equivalents to the amounts shown in the consolidated balance sheet as at March 31, 2018 and 2017 are as follows:
Millions of Yen
Cash and bank deposits
Marketable securities
Sub total
Time deposits due over three months
Marketable securities due over three months
Cash and cash equivalents

2018¥44,525
1,377
45,903(4,671)(1,000)¥40,2312017¥38,940
1,435
40,376(4,056)(1,050)¥35,270

Thousands of U.S.dollars( Note 4 )2018$420,049
13,000433,049(44,074)(9,434)$379,541(Supplemental disclosure of non-cash transactions)
The significant non-cash transactions for the years ended March 31, 2018 and 2017 are as follows:
Millions of Yen
Leased assets
Lease obligations

2018¥1,045
1,290

28

2017
¥814
1,366

Thousands of U.S.dollars( Note 4 )2018$9,858
12,17013. Other Comprehensive Income
The following table presents reclassification adjustments and tax effects allocated to each component of other comprehensive
income (loss) for the years ended March 31, 2018 and 2017:

2018
¥432
–
432
(143)
289

2017
¥692
(100)
592
(107)
484

Thousands of U.S.dollars( Note 4 )2018$4,075–
4,075(1,349)
2,730

566
–
566
–
566

(1,219)–(1,219)–(1,219)

5,341
–
5,341
–
5,341

(205)
304
98
(30)
68

(8)
285
276
(84)
192

(1,934)
2,868
925
(283)
648

0
(0)

1
(8)

0
0

(0)
¥923

(6)
(¥549)(4)$8,715

Millions of Yen
Net unrealized gains (losses) on other securities:
Amount arising during the year ………………………………………………
Reclassification adjustments ……………………………………………………
Amount before tax effect ………………………………………………………
Tax effect …………………………………………………………………………
Net unrealized gains (losses) on other securities ……………………………
Translation adjustments:
Amount arising during the year ………………………………………………
Reclassification adjustments ……………………………………………………
Amount before tax effect ………………………………………………………
Tax effect …………………………………………………………………………
Translation adjustments ………………………………………………………
Retirement benefits liability adjustments:
Amount arising during the year ………………………………………………
Reclassification adjustments ……………………………………………………
Amount before tax effect ………………………………………………………
Tax effect …………………………………………………………………………
Retirement benefits liability adjustments ……………………………………
Share of other comprehensive income (loss) of companies accounted for by the equity method:Amount arising during the year ………………………………………………
Reclassification adjustments ……………………………………………………
Share of other comprehensive income of companies accounted
for by the equity method ………………………………………………………
Total other comprehensive income (loss) ……………………………………

14. Lease Commitments(1) Lessees’ accounting
Minimum future lease payments under operating leases subsequent to March 31, 2018 and 2017 for non-cancelable operating leases are summarized as follows:
Millions of Yen
Due within one year
Due over one year
Total

2018
¥987
1,332
¥2,319

2017
¥810
1,365
¥2,176

Thousands of U.S.dollars ( Note 4 )2018$9,311
12,566$21,877(2) Lessors’ accounting
Minimum future lease income under operating leases subsequent to March 31, 2018 and 2017 for non-cancelable operating leases is summarized as follows:
Millions of Yen
Due within one year
Due over one year
Total

2018
¥101
604
¥705

2017
¥100
705
¥805

29

Thousands of U.S.dollars ( Note 4 )
2018
$953
5,698
$6,651

15. Financial Instruments
Overview(1) Management policy
The management policy of the Company is to invest surplus funds into low-risk financial instruments. The Company has not held any high-risk financial instruments.

(2) Financial instruments and their risks
Both notes receivable and accounts receivable as operating receivables are exposed to credit-related losses in the event of nonperformance by counterparties. Trade notes, accounts payable and electronically recorded monetary claims as trade liabilities are due and payable within one year. Marketable securities and investments in securities are exposed to changes inmarket price. The Company holds marketable securities and investments in securities mainly as held-to-maturity or due to relationship-building with counterparties.

(3) Risk management policiesa) Management policy for credit risk (losses in the event of nonperformance by counterparties)
The Company has an established credit management policy, whereby credit risk exposure arising from both notes and accounts receivable is monitored on an ongoing basis in order todetect credit deterioration as well as to trigger appropriate minimizing measures at its early stages.
Held-to-maturity investments are subject to the examination and decision of the Funds Management Review Committee and accordingly, investments largely consist of negotiable
deposits and high graded securities, which are considered to have minimal credit risk.

b) Management policy for market risk (foreign currency exchange and interest rates)
Marketable securities and investment securities are marked to market and the financial condition of the issuer (client company) is monitored periodically.
In addition, the holdings of bonds and securities, other than held-to-maturity investments, are reviewed on an ongoing basis, taking into consideration the relationship, and other factors, with the issuer.

c) Management policy for liquidity risk (in default on its financial obligations)
The Company has managed liquidity risk by holding appropriate funds based on the forecasts, and actual cash flow is continuously monitored by the management.

(4) Supplementary explanation on the fair value of financial instruments
The fair values of financial instruments are based on quoted market prices. If quoted market prices are unavailable, the fair values are estimated based on the prices which are assessed asreasonable by the Company. Since the Company takes contingent variable factors into account when estimating the fair value, it would vary depending on the different preconditions.

Estimated fair value of financial instruments
Differences between carrying value and estimated fair value as of March 31, 2018 and 2017 are as follows:
Financial instruments whose fair values are difficult to estimate are not stated in the following table; refer to (* 2).

(1) Cash and bank deposits(2) Notes and accounts receivable(3) Marketable securities and investments in securities① Held-to-maturity② Subsidiaries and affiliates③ Other securities
Total (Assets)(4) Trade notes and accounts payable(5) Electronically recorded monetary claims
Total (Liabilities)(1) Cash and bank deposits(2) Notes and accounts receivable(3) Marketable securities and investments in securities① Held-to-maturity② Subsidiaries and affiliates③ Other securities
Total (Assets)(4) Trade notes and accounts payable(5) Electronically recorded monetary claims
Total (Liabilities)

Carrying
value¥44,525
33,632
1,350
1,681
7,378
¥88,568¥7,034
6,454¥13,488

Carrying
value¥38,940
33,710
1,150
1,607
6,439
¥81,849¥7,6296,580¥14,209

Millions of Yen
2018
Estimated
Difference
fair value
in amounts¥44,525–
33,632
–
1,341
2,764
7,378
¥89,642¥7,034
6,454¥13,488

(¥8)
1,082
–
¥1,074–––

Millions of Yen
2017
Estimated
Difference
fair value
in amounts¥38,940–
33,710
–
1,147
1,134
6,439
¥81,374¥7,6296,580¥14,209

30

(¥2)
(472)
–
(¥474)–––

Thousands of U.S.dollars ( Note 4 )2018
Carrying
Estimated
Difference
value
fair value
in amounts$420,049$420,049–
317,290317,290–
12,73615,85869,604$835,547$66,360
60,891$127,245

12,651
26,07569,604$845,679$66,360
60,891$127,245($75)
10,208$10,132–––

(NOTES)(* 1): Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivative transactions.
Assets:(1) Cash and bank deposits, and (2) Notes and accounts receivable:
Since these items are settled in a short period of time, their carrying value approximates fair value.
(3) Marketable securities and investments in securities:
Since negotiable certificate of deposits are settled in a short period of time, their carrying values approximate fair value.
The fair value of the other stocks is based on quoted market prices. The fair value of debt securities is based on either quoted market prices or prices provided by the financial institutions making markets in these securities. For information on securities classified by holding purpose, please refer to (*5) Heldto-maturity and other securities with readily determinable fair value as at March 31, 2018 and 2017.
Liabilities:(4) Trade notes and accounts payable, and (5) Electronically recorded monetary claims:
Since these items are settled in a short period of time, their carrying value approximates fair value.

(*2): Financial instruments whose fair values are difficult to estimate are as follows:
Millions of Yen
Unlisted securities (Carrying value)

2018
¥331

2017
¥271

Thousands of U.S.dollars ( Note 4 )2018$3,123The unlisted securities as stated above are not included in (3) Marketable securities and investments in securities because it is difficult to estimate the fair value
based on the quoted market prices in active markets.

(*3) Redemption schedule for monetary claims and securities with maturities subsequent to the balance sheet date is as follows:

Cash and bank deposits
Notes and accounts receivable
Marketable securities and investments in securities:
Held-to-maturity securities
Total

Cash and bank deposits
Notes and accounts receivable
Marketable securities and investments in securities:
Held-to-maturity securities
Total

Cash and bank deposits
Notes and accounts receivable
Marketable securities and investments in securities:
Held-to-maturity securities
Total

Due
within 1 year
¥44,525
33,632
1,000¥79,157

Millions of Yen
2018
Due after 1 year
Due after 5 years
but within 5 years
but within 10 years
–
–
–
–
–
–

Due
within 1 year
¥38,940
33,7101,050¥73,701

Millions of Yen
2017
Due after 1 year
Due after 5 years
but within 5 years
but within 10 years
–
–
–
–
–
–

Due
within 1 year
$420,049
317,2909,434$746,764

¥100
¥100

Thousands of U.S.dollars ( Note 4 )2018
Due after 1 year
Due after 5 years
but within 5 years
but within 10 years
–
–
–
–
–
–

31

¥350
¥350

$3,302$3,302Due
after 10 years
–
–
–
–

Due
after 10 years
–
–
–
–

Due
after 10 years––––

(*4) Repayment schedule for bonds payable, long-term loans payable, lease obligations and other interest-bearing liabilities
subsequent to the balance sheet date:Long-term loans payable
Lease obligations
Total

Due within 1 year The second year––
¥1,296¥944¥1,296¥944

Millions of Yen
2018
The third year The fourth year
–
–
¥748
¥460
¥748
¥460

The fifth year
–
¥239
¥239

Thereafter
–
¥198
¥198

Millions of Yen

2017
Long-term loans payable
Lease obligations
Total

Due within 1 year The second year–¥469
¥1,391¥1,125¥1,391¥1,594

The third year
–
¥766
¥766

The fourth year
–
¥568
¥568

The fifth year
–
¥301
¥301

Thereafter
–
¥192
¥192

Long-term loans payable
Lease obligations
Total

Thousands of U.S.dollars ( Note 4 )2018
Due within 1 year The second year The third year The fourth year
The fifth year
–
–
–
–
–
$12,236$8,909$7,058$4,343$2,255$12,236$8,909$7,058$4,343$2,255

Thereafter–$1,873$1,873(*5) Held-to-maturity and other securities with readily determinable fair value as at March 31, 2018 and 2017 are as follows:
Millions of Yen
2018

Held-to-maturity

Other securities with carrying
value exceeding acquisition cost
StocksOther
		Subtotal
Other securities with carrying
value not exceeding acquisition cost
StocksOther
		Subtotal
		TotalHeld-to-maturity

Other securities with carrying
value exceeding acquisition cost
StocksOther
		Subtotal
Other securities with carrying
value not exceeding acquisition cost
StocksOther
		Subtotal
		TotalThousands of U.S.dollars ( Note 4 )2018
Unrealized
Carrying value
Fair value
gains (losses)$12,736$12,651($75)

Carrying value

Fair value¥1,350¥1,341

Unrealized
gains (losses)(¥8)

Carrying value

Acquisition
cost

Unrealized
gains (losses)

Carrying value

Acquisition
cost

Unrealized
gains (losses)¥6,606375
6,981¥3,546373
3,919¥3,0592
3,061$62,3213,538
65,858$33,453
3,519
36,972$28,85819
28,877394
2396¥7,378399
2402¥4,322(5)–(5)¥3,056

3,717
19
3,736
$69,604

3,764
19
3,792
$40,774

(47)
–
(47)
$28,830

Carrying
value¥1,150Millions of Yen
2017
Fair
value
¥1,147

Unrealized
gains (losses)(¥2)

Carrying
value

Acquisition
cost

Unrealized
gains (losses)¥5,537382
5,919¥2,843377
3,221¥2,693
4
2,698

517
2
519
¥6,439597
2599¥3,820(80)–(80)¥2,61832

(*6) Other securities sold for the year ended March 31, 2018 and 2017 are as follows:

Stocks		TotalMillions of Yen
2018
Total amount of Total amount ofSales amountloss on salegain on sale
¥300
¥250
–
¥300
¥250
–

Thousands of U.S.dollars ( Note 4 )2018
Total amount of Total amount ofSales amountloss on salegain on sale$2,838$2,366–$2,838$2,366–

Stocks		TotalMillions of Yen
2017
Total amount of Total amount ofSales amountloss on salegain on sale
¥400
¥100
–
¥400
¥100
–

Thousands of U.S.dollars ( Note 4 )2017
Total amount of Total amount ofSales amountloss on salegain on sale
$3,576$896–$3,576$896–

33

16. Retirement Benefits
Outline of the retirement benefit plans adopted(1) 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.
(2) Defined contribution pension scheme: From March 1, 2009, the Company adopted a defined contribution pension scheme as part of its retirement benefit plan.
(3) Employees’ pension fund: Since April 1, 1980, the Company has used an multi-employer contributory funded pension plan as a supplement to its existing
retirement benefit scheme.
In addition, certain subsidiaries have lump-sum payment plans and a defined benefit corporate pension plan. They calculate the retirement benefit expenses, andassets and liabilities for retirement benefits by means of a simplified method.
Multi-employer scheme
The required contributions for the employees’ pension fund system, which is a multi-employer pension scheme that is accounted for in the same manner as adefined contribution plan, were ¥ 286 million in the year ended March 31, 2017. There is no contribution for the year ended March 31, 2018.
(1) Most recent funded status of the multi-employer plan

As of March
31, 2016¥57,799

Thousands of U.S.dollars( Note 4 )As of March
31, 2016$545,274

60,538(¥2,738)

571,113($25,830)

Millions of Yen

Amount of pension assets
Total of amount of pension obligations based onamount of pension financing calculations in thescheme and minimum reserve amount
Net amount(2) Amount paid by the Company as a percentage of contributions to the multi-employer plan
For the year ended March 31, 2016:

22.9%(3) Supplemental information
The net amount in (1) above was mainly due to a prior service obligation in pension financing (As of March 31, 2016: ¥ 8,554 million). The
method of amortizing the prior service obligation in this plan is to evenly amortize the principal and interest over a period of 20 years, and special
contributions of ¥ 187 million were expensed in the Company’s consolidated financial statements in the year ended March 31, 2017. The percentage of the Company’s contribution in (2) above does not match the percentage of its actual pension obligation.The information for the year ended
March 31,2018 is omitted as the plan has been already dissolved.
The changes in the retirement benefit obligation for the years ended March 31, 2018 and 2017 are as follows:
Millions of Yen
2018¥12,008
885
56
176
(313)
63
50
¥12,926

Balance at the beginning of the year
Service cost
Interest cost
Actuarial loss
Retirement benefits paid
Prior service cost
Other
Balance at the end of the year2017
¥11,996
853
50
(99)
(754)
–
(38)
¥12,008

Thousands of U.S.dollars( Note 4 )2018$113,283
8,349
528
1,660
(2,953)594
472$121,943

The changes in plan assets for the years ended March 31, 2018 and 2017 are as follows:
Millions of Yen
2018¥9,733
242
(26)
935
(249)
25
¥10,661

Balance at the beginning of the year
Expected return on plan assets
Actuarial loss
Contributions by the Company
Retirement benefits paid
Other
Balance at the end of the year

34

2017
¥9,181
229
(84)
1,016
(615)
5
¥9,733Thousands of U.S.dollars( Note 4 )2018$91,821
2,283
(245)
8,821
(2,349)236$100,575

The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheet as of March 31, 2018and 2017 for the Company’s and the consolidated subsidiaries’ defined benefits plans:
Thousands of U.S.dollars
Millions of Yen( Note 4 )
2018
2017
2018
Funded retirement benefit obligation¥12,796¥11,892$120,717(10,661)(9,733)(100,575)
Plan assets at fair value
2,135
2,159
20,142
129
116
1,217
Unfunded retirement benefit obligation
Net liability for retirement benefits in the balance sheet
2,265
2,275
21,3682,265–¥2,265

Liability for retirement benefits
Asset for retirement benefits
Net liability for retirement benefits in the balance sheet

21,368–$21,368

2,275–¥2,275The components of retirement benefit expense for the years ended March 31, 2018 and 2017 are as follows:
Millions of Yen
2018
¥885
56
(242)
304
59
¥1,064Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Retirement benefit expense

2017
¥853
50
(229)
264
(3)
¥935

Thousands of U.S.dollars( Note 4 )2018$8,349528(2,283)
2,868
557$10,038

The components of retirement benefits liability adjustments included in other comprehensive income (before tax effect) for the years ended March
31, 2018 and 2017 are as follows:
Thousands of U.S.dollars
Millions of Yen( Note 4 )
2018
2017
2018
Prior service cost
(¥3)
(¥3)
($28)
102
280
962
Actuarial gain
Total
¥98
¥276
$925
The components of retirement benefits liability adjustments included in accumulated other comprehensive income (before tax effect) as of March
31, 2017 and 2016 are as follows:
Thousands of U.S.dollars
Millions of Yen( Note 4 )
2018
2017
2018
Unrecognized prior service cost
¥3
¥6
$28
(1,325)(1,428)(12,500)
Unrecognized actuarial loss
Total(¥1,322)(¥1,421)($12,472)
The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2018 and 2017 is as follows:
Millions of Yen
2018
2017
12%
9%
56%
60%
13%
12%
19%
19%
100%
100%

General accounts
Bonds
StocksOther
Total

The expected return on plan assets has been estimated based on the anticipated allocation to each asset class and the expected long-term returns
on assets held in each category.
The assumptions used in accounting for the above plans were as follows:**They are calculated by the weighted average method.
2018
0.7%
2.5%
5.1%

Discount rate
Expected long-term rate of return on plan assets
Expected rates of salary increases

35

2017
0.7%
2.5%
5.1%

For defined benefit plans to which the simplified method is applied, the changes in the retirement benefit obligation for the years ended March 31,2018 and 2017 are as follows:
Millions of Yen
2018
¥82
38
(12)
(24)
0
¥84

Balance at the beginning of the year
Retirement benefit expense
Retirement benefits paid
Contributions to plans
Other
Balance at the end of the year

2017
¥89
35
(18)
(23)
(0)
¥82

Thousands of U.S.dollars( Note 4 )
2018
$774
358
(113)
(226)
(0)
$792

The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheet as of March 31, 2018and 2017 for the Company’s and the consolidated subsidiaries’ defined benefits plans:

Unfunded retirement benefit obligation
Net liability for retirement benefits in the balance sheet

2018
¥224
(269)
(44)
129
84

2017
¥202
(241)
(38)
121
82

Thousands of U.S.dollars( Note 4 )2018$2,113(2,538)
(415)
1,217
792

Liability for retirement benefits
Asset for retirement benefits
Net liability for retirement benefits in the balance sheet

181
(96)
¥84

170
(88)
¥82

1,708
(906)
$792

Millions of Yen
Funded retirement benefit obligation
Plan assets at fair value

Retirement benefit expenses calculated using the simplified method for the years ended March 31, 2018 and 2017 are as follows:
Millions of Yen
2018
¥38

Retirement benefit expenses

2017
¥35

Thousands of U.S.dollars( Note 4 )
2018
$358

Contributions to defined contribution plans of the Company and its consolidated subsidiaries for the years ended March 31, 2018 and 2017 are as follows:
Millions of Yen
2018
¥563

Contributions to defined contribution plans

36

2017
¥397

Thousands of U.S.dollars( Note 4 )2018$5,311

17. Income Taxes
Deferred tax assets and liabilities (both current and non-current) as at March 31, 2018 and 2017 consisted of the following
elements:t
Millions of Yen

Thousands of U.S.dollars(Note 4)

2018

2017

2018

Deferred tax assets:
Accrued enterprise tax
Accrued employees' bonuses
Accounts payable and long-term accounts payable
Net liability for retirement benefits
Loss carried forward
Loss on write-down of investments in securities
Surplus on allowance for doubtful accounts
Unrealized gains
OthersLess: valuation allowance
Total deferred tax assets

¥192
826
–
729
972
305
156
585
1,137
(1,239)¥3,666

¥155
747
45
736
1,168
304
154
629
1,423
(1,455)¥3,911$1,811
7,792
6,877
9,170
2,877
1,472
5,519
10,726(11,689)$34,585

Deferred tax liabilities:
Reserve for advanced depreciation of building
Acquired intangible assets
Unrealized loss on other securities
OthersTotal deferred tax liabilities
Net deferred tax assets

(10)
–
(824)
(66)
(901)
¥2,764

(11)
(3)
(681)
(59)
(756)
¥3,154(94)(7,774)(623)(8,500)$26,075–

Reconciliation of the effective statutory tax rate and the actual tax rate is shown below:
Effective statutory tax rate
Adjustments:
Entertainment and other nondeductible expenses
Dividends and other nontaxable income
Inhabitant tax on per capita levy
Nondeductible amortization of goodwill
Eliminated dividend received from subsidiaries
Realization of tax benefits on operating losses
Tax credit for research and development expenses
Valuation allowance
Deferred tax assets reduced by change of taxation rates
Difference of foreign subsidiaries' taxation rates
Equity in earnings of affiliates
OthersActual tax rate

2018
30.8%

2017
30.8%

0.6
(2.3)
0.6
0.8
2.5
(0.5)
(0.2)
(0.2)
2.4
(0.7)
(0.2)
0.2
33.8%

0.6
(2.0)
0.6
1.2
2.3
(0.4)
(0.4)
(0.2)
–
(0.0)
(0.1)
0.3
32.7%

(NOTES)Due to the tax reform acts enacted in the United States on December 22, 2017, the federal corporate income tax rate in the U.S. is reduced from
35% to 21% from the fiscal year commencing after January 1,2018. As a result, the Company’s deferred tax assets(net of deferred tax liabilites)
decreased by ¥ 349 million and income taxes-deferred increased by the same amount in the year ended March 31,2018.
Also, due to the tax reform acts enacted in Belgium on December 25, 2017, the effective tax rate utilized for deferred tax assets and liabilities ischanged from 33.99% to 29.58% for deferred tax assets and liabilities expected to be settled or realized in the periods from January 1, 2018 to
December 31, 2019 and to 25% for the subsequent periods.As a result, the Company’s deferred tax assets(net of deferred tax liabilities) decreased by¥ 21 million and income taxes-deferred increased by the same amount in the year ended March 31,2018.

37

18. Segment Information
The reportable segments of the Company are components for which discrete financial information is available and whose operating results are regularly reviewed by the Executive Committee to make decisions about resource allocation and to assess performance.
The reportable segments are as follows:
1. Time information system business
2. Environment system business(1) Sales, profits or losses, assets and other items by reportable segments
Millions of Yen
2018
Reportable segments
Time information Environment
Total
system business system businessNet sales:
Sales to third parties
Intersegment sales and transfers
		TotalSegment profit or loss
Segment assets
Depreciation and amortization
Investment in equity-method affiliates
Increase in tangible and intangible fixed assets¥91,268–
91,26813,044
69,041
3,980
1,681
4,537

¥33,136–
33,136
5,189
27,422509–
466¥124,405–
124,405
18,23496,464
4,489
1,681
5,004

Adjustments/
Eliminations

Consolidated–––(¥3,884)
48,982573–
655¥124,405–
124,405
14,350145,446
5,063
1,681
5,659

Adjustments/
Eliminations

Consolidated–––(¥3,618)
47,996554–
668¥120,124–
120,124
13,165
137,888
4,933
1,607
5,587

Millions of Yen
2017
Reportable segments
Time information
Environment
system business system businessNet sales:
Sales to third parties
Intersegment sales and transfers
		TotalSegment profit or loss
Segment assets
Depreciation and amortization
Investment in equity-method affiliates
Increase in tangible and intangible fixed assets¥87,010–87,01011,89062,616
3,865
1,607
4,438

¥33,113–
33,113
4,893
27,275
513
–
481

Total
¥120,124–
120,124
16,78489,892
4,379
1,607
4,919

Thousands of U.S. dollars (Note 4)
2018
Reportable segments
Adjustments/
Time information Environment
Eliminations
Total
system business system businessNet sales:
Sales to third parties
Intersegment sales and transfers
		TotalSegment profit or loss
Segment assets
Depreciation and amortization
Investment in equity-method affiliates
Increase in tangible and intangible fixed assets$861,024–
861,024
123,063
651,339
37,553
15,86442,807$312,612–
312,612
48,962
258,703
4,803
–
4,403

38

$1,173,636–
1,173,636
172,025
910,043
42,356
15,86447,210–––($36,642)
462,097
5,411
–
6,186

Consolidated$1,173,636–
1,173,636
135,382
1,372,140
47,767
15,86453,396

(2) Related Information
Geographic Segments

Information by geographic region for the years ended March 31, 2018 and 2017 is summarized as follows:
Millions of Yen

Net sales:
Japan
North America
OthersTotal

2018¥83,620
16,46924,315¥124,405

2017¥82,035
17,141
20,947¥120,124

Millions of Yen

Tangible fixed assets:
Japan
OthersTotal

2018¥20,745
3,234¥23,980

Thousands of U.S.dollars(Note 4)

2018
$788,869
155,376
229,390$1,173,636
Thousands of U.S.dollars(Note 4)

2018
$195,711
30,517$226,2302017¥21,036
2,653¥23,689(3) Information on both “amortization of goodwill” and “unamortized balance” by reportable segments as at and for theyears ended March 31, 2018 and 2017 is summarized as follows:

Amortization of goodwill
Unamortized balance

Millions of Yen
2018
Reportable segments
Time information Environment
Total
system business system business
¥450
60
¥511
¥2,695199¥2,895

Eliminations/
Corporate
–
–

Total
¥511
¥2,895

Millions of Yen
2017

Amortization of goodwill
Unamortized balance

Reportable segments
Time information
Environment
system business system business¥624
59¥2,895
269

Amortization of goodwill
Unamortized balance

Thousands of U.S.dollars (Note 4)
2018
Reportable segments
Eliminations/Time information Environment
Corporate
Total
system business system business$4,248575$4,824––$25,432
1,885$27,318

39

Total
¥684
¥3,165

Eliminations/
Corporate
–
–

Total
¥684
¥3,165

Total$4,824$27,318

19. Per Share Data
Net assets and net income per share as at and for the years ended March 31, 2018 and 2017 are as follows:(1) Net assets per share
Yen

Net assets per share2018¥1,381.90

U.S.dollars (Note 4)2017¥1,301.29

2018$13.037

The basis for these calculations is as follows:
Thousands of U.S.dollars(Note 4)

Millions of Yen

Total net assets in consolidated balance sheet
Amount to be deducted from total net assets(Out of the above non-controlling interest portion)
Net assets relating to common stock

2018¥105,634
543(543)
105,0912017¥99,421458(458)
98,963

2018$996,553
5,127(5,127)
991,426

SharesNumber of shares of common stock used tocompute net assets per share2018
76,048,226

2017
76,050,178(2) Net income per share
Yen

2018
¥132.12Net income per share

U.S.dollars (Note 4)2017¥120.792018$1.246

Notes: Diluted net income per share is omitted as there were no potential shares with dilutive effect.
The basis for these calculations is as follows:
Millions of Yen

2018¥10,019
10,019Net income in the consolidated statement of income
Net income relating to common stock2017¥9,223
9,223

Thousands of U.S.dollars(Note 4)2018
$94,519
94,519

SharesAverage number of shares ofcommon stock outstanding during the year2018
75,839,732

2017
76,364,626(3) Significant Subsequent Events
On February 1, 2018, the Board of Directors of Amano Corporation approved the acquisition of a valet parking business through its subsidiary in the United States,
Amano McGann, Inc. (hereinafter referred to as “AMI”) from Service Tracking Systems, Inc. (hereinafter referred to as “STS”), a California-based company, and the acquisition of the business was completed on February 2, 2018.
(1) Purpose of Business Acquisition
In addition to the market share of parking fee maintenance system which is AMI’s mainstream business,through the acquisition of the valet parking businessfrom STS who pioneered the related market and has the top market share and its products,services and customer base,we are seeking further growth in theparking business in North America.
(2) Name of Company Subject to Business Acquisition
Service Tracking Systems, Inc.
(3) Description of Acquired Business
Valet Parking Business(4) Purchase Price
US$20.5 million*Approximately ¥2.3 billion (1USD = JPY113.05: as of December 31, 2017)(5) Acquisition Date
February 2, 201840

Corporate Data
Domestic Operations
HEAD OFFICESALES OFFICESDOMESTIC SUBSIDIARIES275 Mamedocho, Kohoku-ku, Yokohama,
Kanagawa, JAPAN 222-8558

72 Sales Offices Located in major cities,
including

AMANO MANAGEMENT SERVICE CORPORATIONAMANO MAINTENANCE ENGINEERING CORPORATIONAMANO BUSINESS SOLUTIONS CORPORATIONAMANO SECURE JAPAN CORPORATIONENVIRONMENTAL TECHNOLOGY CO., LTD.
AMANO MUSASHI ELECTRIC CORPORATIONAMANO AGENCY CORPORATIONFACILITIESSAPPORO Office, SENDAI Office
OMIYA Office, TOKYO Office
NAGANO Office, NIIGATA Office
YOKOHAMA Office, HAMAMATSU Office
NAGOYA Office, KANAZAWA Office
KYOTO Office, OSAKA Office
OKAYAMA Office, HIROSHIMA Office
TAKAMATSU Office, FUKUOKA Office

SAGAMIHARA Factory
HOSOE Factory

Board of Directors
Chairman & Representative Director(Outside) Directors

Operating Officers

Izumi NAKAJIMA
President & Representative Director

Isao KISHI
Kiyoshi KAWASHIMA

Hiroyuki TSUDA(Full-time) Audit & Supervisory Board Member

Director & Executive Operating Officer

Toru UENO
Bungo NOGAWA

Minoru YONEZAWA
Susumu IKOMA
Tatsuo NIIHO
Masahiko MORITA
Myeong-Jin JEON
Tetsuhiro KONDO
Jun NAKAKURO
Sachio OTAKA
Takashi KASAI
Yoshihiko HATA
Hiroyuki KOBARI
Kirihito NINOMIYA

Hiroshi SHIRAISHI(Outside) Audit & Supervisory Board Member

Director & Managing Operating Officer

Yoshiyuki SATO
Takehide ITONAGA

Takeshi AKAGI
Yasuhiro SASAYA
Director & Operating Officer

Kunihiro IHARA
Manabu YAMAZAKI

Overseas Operations
1. AMANO USA HOLDINGS,INC.
2. AMANO CINCINNATI,INC.
3. AMANO CINCINNATI,INC. OHIO FACTORY
4. AMANO McGANN CANADA INC.
5. AMANO PIONEER ECLIPSE CORPORATION
6. AMANO McGANN, INC.
7. ACCU-TIME SYSTEMS, INC.
8. AMANO TIME&ECOLOGY DE MEXICO S.A. DE C.V.

9

17.		AMANO SOFTWARE ENGINEERING (SHANGHAI)CO.,LTD.
9. ACCU-TECH SYSTEMS, Ltd.
18.		AMANO PARKING SERVICE LTD.
10. AMANO EUROPE HOLDINGS, N.V.
19.		AMANO MALAYSIA SDN.BHD.
11. AMANO EUROPE, N.V.
20.		AMANO TIME&AIR SINGAPORE PTE.LTD.
12. AMANO TIME&PARKING SPAIN S.A.
21.		PT.AMANO INDONESIA
13. HOROQUARTZ, S.A.
22.		AMANO THAI INTERNATIONAL CO.,LTD.
14. HOROQUARTZ MAROC, S.A.
15. AMANO KOREA CORPORATION
16. AMANO INTERNATIONAL TRADING(SHANGHAI)CO.,LTD.

10,11

13

6

12
15

14

19

5

AMANO CORPORATION

16,17
18

8

22
20
21

41

4
3

1,2,7

275 Mamedocho, Kohoku-ku, Yokohama, Kanagawa, 222-8558 JAPAN
PHONE : +81 (45) 401-1441
FAX: +81 (45) 439-1150
HOME PAGE : http://www.amano.co.jp/English/