FINANCIAL REPORT
April 2019 - March 2020

Business Policies
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-long term business strategy of the company
Amano launched a new Medium-term Business Plan for the three years from April 2020 toMarch 2023. An outline of the plan is set out below.
[1] Basic Policies
Under the new Medium-term Business Plan, with the Group’s management concept of “The3rd Stage Towards a 100-year Company-Establishing a solid business foundation that leads tosustainable growth,” we will address the following two key issues towards achieving the goalof enhancing our corporate value while keeping ESG management in mind and emphasizing
the establishment of a business management system that is suitable for the era of globalizationand further efforts to ensure thorough compliance as a foundation.
(i) Investments in growth drivers.
In response to the rapidly evolving digital transformation movements, the Company will
vigorously push forward with digitalization and the effective use of IT in each business area.
In particular, we will invest steadily in growth drivers including strategic investments in software assets, IoT, AI, etc., to realize sustainable growth in sales and profit.
We will also continue our investments in venture companies and startup companies and
M&A activities, which started under the 7th Medium-term Business Plan, to establish thesixth core business.
(ii) Establishment of unparalleled competitive advantage based on synergy among the strengthsof each business department
After analyzing and grasping the strengths of each business division and Group company
all over again, we will execute strategic investments shown in (i) above to further strengthen
them, while ensuring synergy among them to further enhance our competitive advantages.
In the course of this initiative, the Company will strive to deepen and enhance the customer
base that we have developed and to further enhance the product lineup by anticipating
market trends.
The target of the new Medium-term Business Plan is the achievement of the “AVERAGE 12%
in the 3KPIs.”(1) Operating profit ratio (OPR): Achieve at least 13%(2) Cash conversion cycle (CCC): Shorten by at least 12%(3) Return on equity (ROE): Achieve at least 11%
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 “3-in-1 activity” leveraging the strength of direct sales
and support. The Group will aim to establish an unparalleled competitive advantage in eachbusiness by expanding both flow and stock businesses in a balanced manner through the reinforcement of the relationship with existing customers and the expansion of transactions withnew customers.

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The Information Systems business will continue to see various labor-related law amendments
following the enactment of the bills related to the work style reform in April 2019. Employers
are required to keep track of working hours accurately to curb long working hours. In addition,
employers are now legally obliged to conduct complex working hour management in responseto the introduction of equal pay for equal work and changes in work style due to side jobs,
working from outside the office, etc., which creates constant demand for time & attendance
management systems to upgrade or rebuild their working hour management systems to ensure
legal compliance. Demand for cloud services is also expected to increase as more and moreadministrative procedures become available electronically.
In response to this market environment, for the small-to-medium sized enterprise (SME) market, we will continue to market holistic solutions with the “TimePro-NX,” which is an integrated software package to manage time & attendance, human resource management and payroll,to further increase market share. At the same time, we will strengthen the promotion of the“e-AMANO” cloud service to offer electronic processing of various notifications and declarations that arise in the course of service of an employee from hiring through retirement. For the
medium-to-large enterprise market where demand is firm, we will work to strengthen solutions for time & attendance, human resource management, payroll, accounting software, andconsulting services by collaborating with CREO CO., LTD., utilizing “TimePro-VG.” We will
also strengthen our business development efforts around attendance management for teachers,
doctors, and the like, which is expected to grow from now on and will maintain and expand
the customer base with our one-stop services encompassing hardware, software, services, andcloud to further expand our business portfolio.
The Parking Systems business experienced a decline in parking lot utilization rates amid fluctuating economic trends, however, the market continues to grow driven by new demand arising from the spread of cashless payment and ticketless operations. In addition, there are risingneeds to offer solutions to; reduce parking lot management costs, ensure safety and security,heighten environmental considerations, improve user convenience, offer cloud-based services,and provide operational solutions based on ETC technology.
Given these changes in the market environment, we will further strengthen partnerships withmajor parking lot operators and provide various services through our parking lot data centerfor small- and medium-sized parking lot operators while improving the functions and operability of system equipment. We will also continue to respond to transitions in the market including the increased demand for parking reservations, the migration towards a sharing economy,
and the advancement of self-driving technology. In addition, we will continue to strengthen
proposals in the commissioned parking lot management business and strengthen and expand
our efforts for facilities such as bicycle parking lots, security gates and toll roads in order to expand our business.
The Environmental Systems business faces weak corporate appetite for capital investment bothin Japan and overseas following the rapid deterioration in business sentiment.
Given this market environment, in Japan we will aim to increase the quantity of sales of standard equipment by rolling out new products and deploying existing products to new areas andexpand business domains including the pharmaceutical, food, and cosmetics markets, which
are less affected by business sentiment. We will also work to strengthen our engineering capabilities and comprehensive sales, including that of peripheral equipment based on energy
and labor-saving proposals as well as new service proposals leveraging IoT, by partnering withindustrial equipment manufacturers.
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 proportion of women among
newly hired workers, the need to improve safety and operability of cleaning equipment has
been increasing to reduce the burden on these workers. At the same time, the need to maintain building aesthetics at a low cost and demand for cleaning work automation using robot
technology have also been increasing.
In response to these market conditions, we will enhance the product lineup to respond to the
expansion of the robotic cleaning market, provide various services using communication functions, and work to expand the factory market by introducing cleaning devices. We will also
strengthen recurring revenues by means of promoting maintenance contracts and increasingorder intake for supplies, which will maintain and expand our customer base. We will also
promote comprehensive proposals for commissioned cleaning services and aesthetic maintenance.
2. North American market
In the Parking Systems business, we will aim to achieve full recovery in the financial performance2

of Amano McGann, Inc. as soon as possible by executing a drastic reform, and at the same time wewill continue to expand system sales along with the promotion of new systems. In the Information
Systems business, we will strive to expand the business by increasing sales of Accu-Time Systems,
Inc.’s time and attendance information terminals and by enhancing cloud-based products. In the
Clean Systems business, we will further expand the business of the wooden floor sanding equipment division of Amano Pioneer Eclipse Corporation, and develop new markets and identify new
business opportunities. In the Environmental Systems business, Amano Time & Ecology de Mexico
S.A. de C.V. will proceed with strategy setting in the North American market including Mexico.
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. At the same time, we will
aim to expand this business into new countries other than France. In the Parking Systems business, we will strive to expand operations by promoting system equipment sales and 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 work to establish a supply chain network in each region.
[2] Numerical targets
Our new three-year Medium-term Business Plan will come into effect from April 2020 until March 2023, in which we are aiming to achieve ¥140.0 billion or higher in net sales and¥18.5 billion or higher in operating profit by end of March 2023.
(Major assumptions of the numerical targets)(i)	The results for FY2020 (year ending March 31, 2021), which marks the first year of the
new Medium-term Business Plan, will be deeply affected by the COVID-19 pandemic. In
particular, we expect significant setbacks in the first half of FY2020 as our sales and production activities will be greatly curtailed during the curfew enforced by many Governments. Moreover, we are assuming that full normalization will take time as the pace of
post-pandemic recovery will differ by region and country.
(ii)	For unconsolidated ACJ, despite some fluctuations in net sales, the Information Systems
Business is expected to remain on a growth trend tail winded by the Government driven
work style reform initiatives. On the other hand, due to cooling down of Olympic demand, the Parking Systems Business is expected to be slower. Likewise, the Environmental Systems Business is still being affected by the lingering U.S. China trade war. We are
expecting the recovery of these two businesses in late 2021 or during the second half ofthe new Medium-term Business Plan.
(iii)	Parking management services of the Parking Business is expected to remain strong bothin Japan and abroad and thus firmly positioned as the driver of consolidated growth.
(iv)	Amano McGann Inc., of North America, which has suffered from legacy issues, has undergone drastic restructuring and with a new management team in place, the company is
expected to improve its profitability from the second half of the FY2020.
Please note that the numerical targets for the new three-year Medium-term Business Plan set
out below are tentative at this point. Currently, COVID-19 is causing too many uncertainties
hampering realistic future planning, so we intend to review these targets at the end of the firsthalf of this fiscal year (September 2020), at which time, we hope to have a better outlook of
the pandemic and the economic recovery trends of each country.

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Numerical targets

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

FY 2020
FY 2021
FY 2022(year ending March 2021) (year ending March 2022) (year ending March 2023)
AmountYoY (%)
AmountYoY (%)
AmountYoY (%)
110,000(17.3)
125,000
13.6
140,000
12.0
7,000(56.7)
14,000100.0
18,500
32.1
6.4%
–
11.2%
–
13.2%
–
7,800
(53.8)
15,00092.3
19,50030.0
6,100(42.3)

10,00063.9

13,00030.0

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 performance-based
distributions and to buy back shares, as it deems necessary. The Company aims to maintain adividend payout ratio of at least 40% on a consolidated basis, a net asset dividend rate of atleast 2.5%, and a Total Return Ratio of at least 55%.
In line with this policy, taking into account our current-year operations results, we plan to pay
a year-end dividend of ¥36 per share, and the annual per-share dividend for this fiscal year
will be ¥64 (including ¥28 per share paid as the interim dividend), an increase of ¥4 from an
ordinary dividend of ¥60 for the previous fiscal year.
Furthermore, in line with the newly adopted target for Total Return Ratio, we plan to pay out aspecial dividend of ¥20 per share, which, combined with the above annual dividend of ¥64,
the total will be ¥84 per share representing an increase of ¥4 compared to last year. As a result, the consolidated payout ratio will be 59.7%, the net asset dividend rate will be 5.8%, andthe Total Return Ratio will be 59.7%.
With regard to the dividend for the next fiscal year ending March 31, 2021, in line with our
Basic Policy on Distribution of Profits and in view of our outlook for the next fiscal year, wecurrently aim to pay an annual per-share dividend of ¥40 (with an interim dividend of ¥20
and a year-end dividend of ¥20), although we plan to revise it on a timely basis if necessary
depending on our future performance trend. We also intend to achieve the Total Return Ratio
target of 55% or above through dividends and flexible use of share buy-back.
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, 2020

General Business Results for This
Fiscal Year
During the consolidated fiscal year
under review, the global economy
continued its downward trend dueto the impact of the US-China tradewar. In this situation, the Japanese
economy is likely to be increasingly
uncertain about the outlook as economic activities are being affectedby the new coronavirus pandemic,
which star ted in early 2020, while
the manufactur ing industr y remained stagnant due to a slowdown
in exports.
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 7th Medium-term Business Plan launchedin 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 andAmano’s work style reform methodology.
As a result of the above, during the
fiscal year under review, the Company recorded sales of ¥133,084
million, up by 1.0% year-on-year. Operating profit increased by 6.6% to¥16,168 million, ordinary profit went
up by 4.8% to ¥16,864 million, andnet income attributable to ownersof the parent company increased by
15.6% to ¥10,567 million, resulting
in increases in both sales and profit.
(Main factors behind the businessresults)(i) For Amano, on an unconsolidated
basis, sales of time & attendance(T&A) management software,
which is its mainstay product,

remained firm, boosted by thedemand generated by “work stylereform.”.
(ii) In Japan, the Group companies
remained firm with the commissioned parking lot managementbusiness and cloud ser vice fortime & attendance management.
(iii) O ver all over seas profits increased as the Group companies
in Asia remained favorable andthe deficit of Amano McGann,
Inc. in North America reduced.
(iv) A mano (unconsolidated) andsome of its domestic Group
companies faced downward
pressure on performance ascountermeasures against COVID-19 in Japan began in earnest
in March 2020, which is normallya month of high demand.
The following is a breakdown ofsales by business division.

Sales by business division
Category
Time Information System business:
Information Systems
Time Management Products
Parking Systems
Subtotal
Environment System business:
Environmental Systems
Clean Systems
Subtotal
Total(Unit: Millions of yen)

FY2018FY2019(April 1, 2018–March 31, 2019) (April 1, 2019–March 31, 2020)
Amount Ratio (%) Amount Ratio (%)

ChangeAmount%29,176
3,609
63,87996,665

22.2
2.7
48.5
73.4

31,1103,475
65,429100,016

23.4
2.6
49.2
75.2

1,934
(133)
1,550
3,350

6.6
(3.7)
2.4
3.5

23,833
11,21335,047
131,713

18.1
8.5
26.6
100.0

22,432
10,63533,068133,084

16.8
8.0
24.8
100.0

(1,401)(578)(1,979)
1,370

(5.9)
(5.2)
(5.6)
1.0

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Time Information System business• Information Systems:
Time & attendance (T&A), payroll,human-resource management, access control, and cafeteria systems• Time Management 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 totaled¥100,016 million, representing an increase of ¥3,350 million (3.5%) yearon-year. The following is a breakdown of sales by business division.

Information Systems¥31,110 million (up 6.6% year-on-year)

In this business, against the backdropof the enactment of the bills related
to the “work style reform” in April
2019, attention is focused on the
future trends of companies’ labor
management effor ts to improve
productivity, make full use of diverse
human resources, and introduce
teleworking, while new statutory requirements, such as the upper limit
on working hours, are put into practice one by one.
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, software sales
increased by ¥2,220 million (27.8%),
hardware sales decreased by ¥185
million (4.1%), and sales generated
by maintenance contracts and supplies ser vices increased by ¥152
million (3.4%) year-on-year. The increase in software sales was mainly
attributable to favorable orders for“TimePro-VG” a piece of software
for medium-sized and large businesses, and “TimePro-NX” for small
to medium-sized businesses. The decrease in hardware sales was due toa reactionary drop in sales from theprevious term’s increase in orders
from the public and education sectors for projects requiring multiple
units. The cloud services developedby Amano Business Solutions Corpor ation continued to perfor mstrongly.
Overall overseas sales decreasedby ¥204 million (down 1.9% yearon-year), as the sales of Accu-Time
Systems, Inc . in Nor th Amer ica
decreased, and the sales of Horoquartz S.A. in Europe also decreased
due to the effect of exchange rates.

Time Management Products¥3,475 million (down 3.7% year-on-year)

Although there is constant demand
for standard devices, the trend toward lower prices has continued inthis business.
In this mar ket environment, theCompany has been wor king on
expanding sales of its “TimeP@CK
series” time recorders, which areequipped with aggregation software
compatible with PCs and offer improved usability and functionality, as
well as concentrating on expanding
its customer base through the promotion of “User-club,” a fee-based
service for members.

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Overall domestic sales for the current term decreased by ¥60 million(2.0%) year-on-year as increased
sales of “TimeP@CK-iC IV CL,”
which were driven by orders fromindustries that had traditionally used
an attendance book to manage attendance, were offset by decreased
sales of standard time recorders.
Overall overseas sales decreased by¥73 million (down 10.0% year-onyear), as sales in North America andEurope fell while sales in Asia wereflat.

Parking Systems¥65,429 million (up 2.4% year-on-year)

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 level ofconvenience for parking lot users,
ensuring safety and security in parking lots, and making reservations andpayments through integration with
the Internet.
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.
Domestic sales for the current term
were as follows. For Amano, on an
unconsolidated basis, while domestic
parking equipment sales decreasedby ¥137 million (0.7%) due to theeffect of the decrease in expor t
projects, despite the increase inprojects for management firms, sales
generated by maintenance contracts
and supplies services increased by¥57 million (0.6%). Amano Management Service Corporation’s commissioned parking lot managementbusiness has been steadily expanding with increased sales, and thenumber of parking spaces undermanagement increased by 24,700(5.3%) from the end of the previous
fiscal year.
Overall overseas sales increased by¥1,332 million (up 5.8% year-onyear) due to an increase in sales in
the Asian region, as the commissioned par king lot managementbusiness expanded steadily, particularly in Korea, Hong Kong, andMalaysia, despite a decrease in salesof Amano McGann, Inc. in Nor th
America.

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¥33,068 million, down by ¥1,979

million (5.6%) year-on-year. The following is a breakdown of sales bybusiness division.

¥64 million (up 1.5% year-on-year)
due to sales increases in Asia, mainly
led by China and Thailand.

Environmental Systems

Clean Systems¥22,432 million (down 5.9% year-on-year)¥10,635 million (down 5.2% year-on-year)

This business is facing an increasingly
uncertain business environment outlook due to concerns about global
economic slowdown on the back of
the new coronavirus pandemic on
top of the effect of U.S.-China trade
friction, although investments forenergy and labor saving remained
firm in Japan.

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 this mar ket environment, theCompany’s domestic strategy focused on capitalizing the demand forits standard equipment by strengthening proposals, mainly targetingcompanies related to machine tools,
electronic par ts and automobiles,
while seeking to win additional
orders from customers in the pharmaceutical, 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 decreased by ¥402 million (5.0%), salesof large-scale systems decreased by¥351 million (5.6%) and sales generated by maintenance contracts andsupplies services decreased by ¥973
million (18.9%) year-on-year.
Overall overseas sales increased by

7

In response to these market conditions, we proposed the automation of cleaning work using robotic
scrubber “EGrobo” and promoted
the new automatic floor scrubbers“EG series” along with the compact
cordless polishers which feature improved safety and usability.
For this fiscal year, overall domestic
sales of cleaning equipment decreased by ¥117 million (5.2%) anddomestic sales generated by maintenance contracts and supplies services decreased by ¥2 million (0.1%)
year-on-year despite an increase insales of cleaning robots as sales ofother equipment were weak.
Overall overseas sales decreased by¥453 million (down 8.0% year-onyear), as sales in North America fell.

General Financial Condition
for This Fiscal Year(i) Assets, liabilities, and net assets
Total assets amounted to ¥154,276
million (up ¥6,667 million from theprevious consolidated fiscal yearend).
• Current assets: an increase of¥5,009 million due to an increase

in cash and bank deposits, etc.
• Fixed assets: an increase of ¥1,658
million due to an increase in leaseassets (net), etc.
Total liabilities amounted to ¥44,798
million (up ¥3,781 million from theprevious consolidated fiscal yearend).
• Current liabilities: an increase of¥1,094 million due to an increasein lease obligations, etc.
• Long-term liabilities: an increase of¥2,686 million due to an increasein lease obligations, etc.
Net assets amounted to ¥109,478
million (up ¥2,886 million from theprevious consolidated fiscal yearend).
• Shareholders’ equity: an increaseof ¥4,334 million due to posting of net income attributable toowners of the parent company,etc.
• Accumulated other comprehensive income: a decrease of ¥1,600
million due to decreases in net
unrealized gains (losses) on available-for-sale securities and foreign
currency translation adjustments,
etc.

Summary of Cash Flows forThis Fiscal Year
Consolidated cash and cash equivalents increased by ¥9,647 million
from the previous fiscal year-end
to a total of ¥52,134 million as ofMarch 31, 2020. The status of eachtype of cash flow at year-end andthe underlying factors are as follows.
Net cash provided by operating activities totaled ¥23,211 million (anincrease in income of ¥7,491 million
year-on-year).

• Main income factors:
Posting of income before income
taxes amounting to ¥16,282 million and posting of depreciation
and amor tization amounting to¥7,310 million.
Posting of a decrease in tradenotes and accounts receivableamounting to ¥3,727 million.
• Main expenditure factors:
Posting of income taxes paid
amounting to ¥5,114 million andposting of a decrease in trade payables amounting to ¥1,148 million.
Net cash used in investing activities totaled −¥5,706 million (adecrease in cash outflow of ¥427
million year-on-year).
• Main income factors:
Posting of proceeds from withdrawal of time deposits amounting to ¥3,720 million and postingof proceeds from redemption of
securities amounting to ¥2,000
million.
• Main expenditure factors:
Posting of increase in time deposits amounting to ¥4,090 million and posting of payment forpurchase of tangible fixed assets
amounting to ¥3,135 million.
Posting of payment for acquisitionof intangible fixed assets amounting to ¥2,033 million and posting of
payment for acquisition of securities
amounting to ¥2,000 million.
Net cash used in financing activities
amounted to −¥7,741 million (anincrease in cash outflow of ¥940
million year-on-year).
• Main income factors:
Posting of proceeds from sale andleaseback amounting to ¥1,215

8

million.
• Main expenditure factors:
Posting of dividends paid amounting to ¥6,228 million and postingof repayments of lease obligations
amounting to ¥2,891 million.

Future Outlook
In the next fiscal year ending March
31, 2021, the global economy will
likely continue its downward trend
due to the impact of the US-China
trade war. In this situation, Japanesemanufacturing industry is expected
to remain stagnant due to slow
exports. In addition, the outlook of
the Japanese economy will become
increasingly uncer tain due to theeffects caused by COVID-19 pandemic which became eminent inearly 2020.
Amid this business environment,
Amano Corporation and its Group
companies will set “The 3rd Stage
Towards a 100-year CompanyEstablishing a solid business foundation that leads to sustainable growth“ as its management concept andwork to address key issues in the
new Medium-term Business Plan
described in “Business Policies” onpage 1 with a view to maximizing
the corporate value of Amano Corporation.
For the next fiscal year ending
March 31, 2021, we forecast net
sales at ¥110,000 million, operating
profit at ¥7,000 million, ordinar yprofit at ¥7,800 million and net
income attributable to parent company shareholders at ¥6,100 million.
For details, please refer to [2] Numerical targets indicated on page 3,
in “Business Policies”. Furthermore,this forecast assumes the currency

exchange rates of ¥105 to the US
dollar and ¥115 to the euro.
Our responses to the outbreak of
COVID-19 are as follows:
With emphasis on the safety andhealth of our employees Amano
Corporation and its domestic groupcompanies have adopted flexible
work programs such as telework(work from home), flextime, and office work shifts.
Overseas group companies are responding in accordance with the enforcements issued by their respective local authorities. For areas under“stay-home” orders, employees areworking from home.
As for our factory operations, domestic factory workers are working in shifts to maintain minimum
operations. On the other hand, U.S.
factories are operating in accordance with the enforcements issued
by their respective state authorities
and has stopped production of certain items. Other permitted items
are in production either normally or
by minimum staffing.
Although we have reflected the effects of COVID-19 in our full-year
forecast as much as possible, we
intend to disclose appropriately according to the future changes in thesituation.

Operating and Other Risk Factors
Matters relating to the qualitative
infor mation contained in thesesummary financial statements andrelating to the consolidated financial
statements that could be envisaged
as having a possible material impact
on investors are described below.
Every effort, including the establish-

ment of various internal committees
such as Compliance Committee
and Risk Management Committee,
are made to identify factors that
may now or in the future pose arisk to the undertaking of businessby the Amano Group, and theserisk factors are then eliminated orotherwise managed in the course ofbusiness. The activities of each committee are reported to the Representative Director as appropriate
and to the Board of Directors asnecessary. The outline of each committee is available for inspection on
the website of the Company.(https://www.amano.co.jp/corp/governance.
html)

One future r isk factor is that if
market expansion is forecast for abusiness activity within the Time Information System business segment(which accounts for a large proportion of the Group’s business) forsuch reasons as a significant change
in the demand str ucture or thecreation of a new market, entities
in other industries or other powerful competitors may be tempted toenter the market. In such an event,if a competitor were to enter with
innovative products or solutions
that surpass Amano’s, the Amano
Group’s market advantage would
decline, which may have a material
impact on its business performance.

Forward-Looking statements are
current as of the date of release of
these financial result (April 24,2020)

As part of its efforts to prepare forthese risks, the Amano Group works
to develop competitive products
on an ongoing basis and strives tofurther strengthen support systems,
engaging in business activities tomaintain and improve its competitive advantage in each business bystrengthening the relationship withexisting customers and expandingtransactions with new customers.

(i) Impact on earnings due to changes in the business environment
The Amano Group uses the unique
technologies and know-how it has
accumulated to provide customers
with high-quality products, services
and solutions, thereby gaining large
market shares in each sphere ofbusiness in Japan, Nor th America,
Europe, and Asia, and developing its
business globally.
In the year ended March 31, 2020,
the Time Information System business accounted for 75.2% of total
sales, and the Environment Systembusiness accounted for 24.8%. Before the deduction of unallocatedexpenses, the Time Information System business contributed 76.6% tooperating profit, while the Environment System business contributed
23.4%. In terms of weighted averagesales over the last five years, theTime Information System businessaccounted for 73.2% of total sales
and 72.6% of operating profit.

9(ii) Fluctuations in exchange rates
The Group engages in businessactivities on a global scale and has
production and sales bases overseas.
In view of this, the Group’s businessresults may be impacted by fluctuations in exchange rates when theproceeds for overseas transactions
are converted into yen.
As precautionary measures against
such a risk, the Group strives to reduce it by considering entering into,
for example, forward exchange contracts as necessary.
(iii) Information security
In the course of providing system solutions and developing cloud businessservices (e.g., ASP, SaaS, and hosting services), the Amano Group handles confidential information, such as personal
information concerning, or provided
by customers. The occurrence of an
unforeseen situation such as a cyberattack that results in loss or leakage ofconfidential or personal information as
described above could have an adverse
material impact on the Group’s businessperformance due to factors such as lossof confidence.

EU General Data Protection Regulation(GDPR) enacted in May 2018, taking
into consideration the guidance of local
experts.
(iv) Natural disasters and infectious diseases
Natural disasters, such as large-scale
earthquakes and windstorms, floods,
etc., caused by climate change on a
global scale, are occurring more andmore frequently, and in the event of anatural disaster, the Group may sustain
damage to human lives or its property,
such as the destruction of sales businesssites and production bases. In the eventof an outbreak of an infectious disease
that makes it difficult for employees tocontinue to work, the Group may temporarily lose the ability to continue toperform its operating activities.

As precautionary measures against sucha risk, the Group has established an Information Security Management Committee to strengthen and ensure thorough implementation of security control
measures based on the “Information
Security Management Rules.” More specifically, we have implemented measures
to prevent the leakage of confidential
information based on the encryption of
hard disks and external storage media
and are providing regular employee education using e-learning. The Company
received the PrivacyMark certificationin February 2014 and makes every effort in the area of information security,
including the supervision of subcontractors and thorough compliance withinternal regulations. European subsidiaries of the Company are also working to
reduce risk by, for example, implementing adequate measures regarding the

As precautionar y measures against
such risks, the Group has put in placemeasures to ascertain and ensure thesafety of employees by introducing an
emergency contact network and safety
confirmation systems, as well as requiring employees to always carry an emergency contact card to prepare for any
disaster. In addition, the Group is moving
its file servers and other equipment toexternal data centers and is improving
the environment to facilitate working

from home to ensure business continuity. Other necessary measures that wehave taken to reduce risk include theestablishment of the protocol for theestablishment of the disaster control
headquarters in the event of an emergency.
(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.
In order to be ready for these risks,
the Group collects information on thesituation in the countries and regionsin which it operates on an ongoing basis before any emergency occurs. The
Group also holds quarterly meetingsof the Global Strategy Conference atwhich top management directly ascertains the situation and gives instructions
to reduce risk. In the event that various
risks are materialized, the Group will
grasp the situation quickly by sharing
and exchanging information with overseas Group companies.

Reference: Trend of cash flow indicators
As of Mar. 31, 2016

As of Mar. 31, 2017

As of Mar. 31, 2018

As of Mar. 31, 2019

As of Mar. 31, 2020

Equity ratio (%)

69.5

71.8

72.3

71.8

70.5

Fair value equity ratio (%)

99.4

122.6

150.1

132.5

116.1

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

25.5

16.0

11.2

14.0

27.1

Interest coverage ratio

292.2

447.8

483.5

539.4

227.9

Notes :	Equity ratio: Equity capital/Total assets
		Fair value equity ratio: Gross market capitalization/Total assets
		Ratio of cash flow to interest-bearing liabilities: Interest-bearing liabilities/Cash flow from operating activities
		Interest coverage ratio: Cash flow from operating activities/Interest payments
Assumptions
		* All indicators are calculated on the basis of consolidated financial values.
		* Gross market capitalization is calculated by multiplying the closing price of the Company’s shares at the year-end by the number of shares of common stock issued and outstanding at the year-end (less treasury stock).
		* The term “cash flow from operating activities” refers to cash flow from operating activities posted under the consolidated statements of cash flows. The term “interest-bearing liabilities” refers to those liabilities stated in the consolidated balance sheets on
which interest is paid. Interest payments equate with the interest paid recorded in the consolidated statements of cash flows

10

Domestic Marketing
Parking Systems
First domestic airport ever to utilize
Electronic Toll Collection System(ETC) for parking (entry & exit) andautomatic payment!
Amano participated in a project"Introduction of ETC multipurpose
service" at the Osaka International
Airport parking lot
In December 2019, for the first time at adomestic airport, the ETC multipurpose
service was introduced at the Osaka International Airpor t parking lot “Southend reservation parking lot”. Amano, asa member of five companies involved in
the implementation, was in charge of the
ETC payment and the parking reservation
system. By utilizing the network-type ETC
technology, the parking entry & exit gates
open and close automatically by responding to the user’s ETC card informationthat was provided during the advance reservation over the Web, enabling smoothticketless entry and exit. Since payment is
automatic with the registered credit card,
it is cashless, enabling smarter exit.
Currently, it is operated for limited parking
customers, but in the future we aim to expand to all customers who use the Osaka
International Airport parking lot. Goingforward, we will continue to contribute toefforts to pursue the convenience of parking lot users and facility-related personnel,
and aim to expand our business.

Clean Systems
The robotic floor scrubber “EGrobo”
is now operational at a new nextgeneration train station, the Takanawa
Gateway Station (JR East)!
JR East’s new train station The “Takanawa
Gateway Station” (Minato-ku, Tokyo) opened

on March 14, 2020. This new station is
known as the next-generation train station
as it actively implements the use of various
robots such as passenger guidance, security
patrols and floor cleaning. Amano’s EGrobo
was selected for the floor cleaning.

issues. As we combat COVID-19, it is said
that we are currently in a transitional phase
to a “new lifestyle” with different norms,
and as such, the “hypochlorous acid water
generator” and the “digital time stamps”
are drawing attention.

EGrobo cleans the vast floors of the station premises during the night allowing
the cleaning staff to concentrate on othercleaning tasks, such as restrooms, which are
not suitable for robots. Such segregation oftasks is helping to improve the overall efficiency of cleaning work.

The hypochlorous acid water generator is a
device that electrolyzes salt water to generate biologically safe water for sterilization, andwe have received orders and inquiries froma wide range of industries including nurseries
and nursing homes for the elderly.

The introduction of EGrobo is gradually expanding to stations, airports, andcommercial facilities, and the number ofcompanies considering the introduction ofrobotic cleaners is increasing year by year
due to the aging of cleaning staff and thelack of manpower. Going forward, we willcontinue to proactively work to expand
the market so that cleaning robots can become a pillar of our clean system business.

Growing expectations for“Hypochlorous acid water
generator” and “digital time stamp”
living under the “new lifestyle” post
COVID-19
The COVID-19 pandemic since the beginning of 2020 continues to threaten
our well being and we must still remain
cautious. Japan is no exception. Amid thesevere situation where business activities
cannot be performed as planned, companies have adopted telework and staggered
work as measure for social distancing. In
addition, workplace hygiene has also beenstrengthened by promoting frequent handwashing and disinfection. Telework has
increased the traffic of various digitized
documents, which has led to formalization

Amano Secure Japan Corporation, a domestic group company engaged in thedigital time stamp business, already has several thousand corporate users. Digital timestamps originated in the private sector as ameans to certify certain documents related
to national tax and to ensure its reliability ofthis private certification system, it is operated
in accordance with the guidelines set out by
the Japan Data Communications Association(JADAC). But amid the rapid implementationof telework and remote work, the demandfor exchanging digitized documents over theinternet is growing, which is accelerating the
movement to convert the system to a national certification system. Digital time stamps
play a major role in authenticating important
documents and certifying that they have notbeen tampered with, so in light of this growing demand, we will strengthen our businessactivities to further promote its use.
At present, the products and services arestill small in scale, but we will contribute to
the corporate activities toward economic
revitalization and nurture these offerings as
a new business domain.

Digital time stamps

Hypochlorous acid water generator

11

Amano International
Trading (Shanghai) Co., Ltd
New introduction of design softwaretools may facilitate visualization of eachstep of presentation to customers,arrangements for manufacturing andinstallation, and trial run.
Now that China is the world’s biggest
manufacturer of automobiles, almost all
the Japanese tire manufacturers have already set up local manufacturing plants in
China. We, Amano International Trade(Shanghai) Co., Ltd., which is a subsidiary
100% owned by Amano corporation, havesuccessfully delivered pneumatic conveying systems to such tire plants for several
years, other than dust-collectors and industrial cleaners which are our main products.
In the past we sometimes faced difficulties
in making adjustments to meet the requestfrom our customers and/or contractors ineach process of designing, installation, andtrial run. However, the recent introductionof a new 3-D software design system canmake our presentation to the customers
more attractive and easier to be understood by visual aids.
This system is applicable not only to installation and incidental construction, butalso to maintenance services to be followed, and therefore it takes customers’hearts and minds.

A pneumatic conveying system we delivered
with inspection to a certain Japanese tire manufacturer in 2019In a trend that regulations on environments and safe manufacturing arestrengthened in China, we can also use the3-D software technology in a remodelingproposal for existing environmental equipment, whereby we can put complicateddetails of the equipment into a clear picture and visualize the planned remodelingarea. Thus, we can win high appreciationfrom both customers and safety supervising regulators.

A figure in our proposal of modification of existing dust-collecting and pneumatic conveying
system

We currently plan to expand the local
manufacturing base for environmental
products to be a winner in the Chinese
market. With the introduction of this 3-D
software system, we hope we will be able
to shorten the lead time from design toproduction even in response to rapidlychanging requests from customers for
product specifications. On top of that, we
will have better control on Quality, Cost,and Delivery (or QCD).

A figure of large dust-collecting system (wettype) locally manufactured and successfully delivered to a certain Japanese battery manufacturer for EV (or Electric Vehicle)

12

Amano Korea Corporation
AKC On-road parking system
AKC developed an unmanned operation
system for on-road parking lots that hasreceived much attention from government offices and local governments in the
Republic of Korea. This unmanned operation system for on-road parking lots ischaracterized by a built-in-camera installed
by a parking space which recognizes thenumber plate and an unmanned machinethat calculates parking fees. This unmanned
operation system is also characterized by a
QR code attached which calculates parking fees without having to move to theunmanned fee calculation machine.
Due to rising maintenance cost from a risein labor cost by the Korean government’s
policy on minimum wages and aggravating
working conditions outdoors by fine dust,
the unmanned operation system for onroad parking lots has received much attention from several government offices andlocal governments since 2019.
In November 2019, a total of 219 unmanned operation systems were installedin six on-road parking lots in Hwaseongcity in Gyeonggi province. A total of 173
unmanned operation systems were installed in three on-road parking lots in
Gangnam-gu in Seoul.

A machine recognizing number plates installed
on a road in Apgujeong-dong in Gangnam-gu in
Seoul

Residents of Gangnam-gu in Seoul andHwaseong city in Gyeonggi province said
that the parking fee calculation systeminstalled at an on-road parking lot set up
in 2019 is very convenient. Based on suchfavorable response from residents, Gangnam-gu plans to install 137 unmanned operation systems in three on-road parking
lots in 2020. Hwaseong city plans to install
206 unmanned operation systems in six
on-road parking lots.
Several local governments have shownlots of interest in the unmanned operation
system. A total of 104 unmanned operation systems will be installed at six onroad parking lots in four regions in the firsthalf of 2020. More unmanned operation
systems are expected to be installed in thesecond half of 2020.
The reason that local governments introduce unmanned operation systems isconvenient parking fee calculation andreduced labor and maintenance costs despite high installation expenses.

Amano Software Engineering (Shanghai) Co., Ltd
AITS and ASE jointly developed
the AS-7900 central pay station.
The system is linked to a license plate
recognition system, which enables fee calculation by entering a vehicle number. QR
codes tickets are also supported.
The payment methods include smartphone
payment (Alipay, WeChat Pay, UnionPay),
UnionPay QuickPass, and cash to meet theneeds of the Chinese market.
A large 32-inch LCD touch panel improves
visibility and ease of use. In addition todisplaying parking lot guides, shop guides
and advertisements by utilizing the large
screen in the future, it will also be possible
to provide more convenient services suchas confirmation of parking locations andguidance on available spaces in conjunction with a parking location confirmation
system.
We are also considering upgrading thesystem with an electronic invoice issuing
function in the future.

Vehicle number input screen
It is possible to search a vehicle by entering up
to 4 digits of the vehicle number.

Vehicle confirmation screen
An image of the vehicle taken at the entry isdisplayed. Proceed with the payment process if
no errors are confirmed

Payment method selection screen
Payment method can be chosen from smart
phone payment, cash, or UnionPay QuickPass.

13

AMANO Corporation and Subsidiaries

Financial Highlights
For the year ended March 31, 2020
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

2020

2019

2020

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

¥133,084¥131,713$1,220,958

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

10,567

9,142

96,945

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

¥141.40¥121.17$1.297

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

84.00

80.00

0.771

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

¥154,276¥147,609$1,415,385

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

63,79459,879585,272

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

109,478

106,592

1,004,392

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

¥31,110¥29,176$285,416

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

3,475

3,609

31,889Parking systems ........................................................

65,42963,879600,275

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

22,432

23,833205,805

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

10,635

11,21397,574

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 ¥109 = US $1, the rate prevailing on March 31, 2020.
- See Note 4 to the Consolidated Financial Statements.

Net Sales

Net Income

Net Income Per Share(Millions of Yen)

(Millions of Yen)

(Yen)

140,000

12000

160

130,000
120,000

140

10000

110,000

120

100,000
8000

90,000100

80,00070,0006000

80

60,00050,00060

4000

40,00040

30,0002000

20,00020

10,000
0

'16

'17

'18

'19

'20

0

'16

'17

'18

14

'19

'20

0

'16

'17

'18

'19

'20

AMANO Corporation and Subsidiaries

Consolidated Balance Sheet
As at March 31, 2020
Thousands of U.S.dollars(Note 4)

Millions of Yen

ASSETS

2020

2019

2020

Cash and bank deposits (Notes 6, 16 and 18)..............

¥54,973¥45,558$504,342

Marketable securities (Notes 16 and 18)......................

1,743

1,184

15,99831,39235,367

288,009

Current assets:

Notes and accounts receivable:
Trade (Notes 7 and 18) ........................................
Less allowance for doubtful accounts ....................

(321)

(476)

(2,950)31,071

34,890285,059

4,282

4,381

39,289Inventories:
Merchandise and finished goods ............................
Work in process ...................................................

622

767

5,712

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

4,796

5,036

44,005

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

2,968

3,630

27,234

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

100,458

95,449921,641

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

28,97728,599265,846

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

22,235

21,638203,998

Leased assets (Note 17)..............................................

10,800

5,883

99,09062,01356,121

568,934(42,313)(40,371)(388,198)

19,70015,749180,735

Land ........................................................................

5,922

6,125

54,334

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

446

236

4,101

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

26,06922,111

239,170

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

1,918

2,734

17,597

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

4,752

4,552

43,601

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

1,118

1,985

10,266

Property, plant and equipment, at cost:Less accumulated depreciation ..........................

Intangible fixed assets :Other intangible fixed assets ......................................

3,150

3,510

28,900Total intangible fixed assets ..................................

10,93912,782

100,363(Notes 5 and 18) .......................................................

2,078

1,947

19,071

Investments in securities (Note 18).............................

6,803

8,153

62,421

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

1,550

1,420

14,221

Deferred tax assets (Note 20)......................................

3,086

2,320

28,313

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

3,952

3,933

36,263

Investments and other assets:
Investments in unconsolidated subsidiaries and affiliates

Less allowance for doubtful accounts .........................

(662)

(509)

(6,078)

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

16,80917,266

154,211

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

¥154,276¥147,609$1,415,385

15

Thousands of U.S.dollars(Note 4)

Millions of Yen

LIABILITIES AND NET ASSETS

2020

2019

2020

Current liabilities:
Trade notes and accounts payable (Note 18)...............
Electronically recorded monetary claims (Note 18)......
Short-term bank loans ..............................................
Lease obligations (Notes 17 and 18) ...........................
Accrued bonuses for employees .................................
Accrued bonuses for directors ....................................
Accrued income taxes ...............................................
Other current liabilities ..............................................
Total current liabilities ..........................................

¥6,210
6,845
678
2,641
2,842
130
3,711
13,60436,664¥7,264
7,015
463
1,105
2,531
130
3,135
13,92435,569$56,979
62,804
6,225
24,236
26,077
1,193
34,047
124,810336,369

Long-term liabilities:
Liability for retirement benefits (Note 19)....................
Long-term accounts payable ..........................................
Lease obligations (Notes 17 and 18) ...........................
Deferred tax liabilities (Note 20).................................
Asset retirement obligations ......................................
Other long-term liabilities...........................................
Total long-term liabilities ......................................
Total liabilities ......................................................

2,736
0
4,495
136
32
732
8,134
44,798

2,478
1
2,354
43
32
536
5,447
41,017

25,106
1
41,246
1,252
300
6,719
74,625
410,993

18,23919,29380,204

18,23919,29375,866167,336
177,001
735,821(4,224)
113,512(4,220)109,178(38,756)
1,041,401

1,025(4,781)(1,061)(4,817)

1,921(4,189)(948)(3,216)

9,406(43,864)(9,736)(44,194)

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

783

630

7,185

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

109,478¥154,276

106,592¥147,609

1,004,392$1,415,385

Net assets (Notes 14 and 15):
Shareholders' equity:
Common stock
Authorized - 185,476,000 shares
Issued:March 31, 2020 and 2019 - 76,657,829 sharesin 2020 and 2019 ..............................................
Capital surplus .....................................................
Retained earnings .................................................
Treasury stock at cost, 1,925,901 shares in 2020
and 1,924,625 shares in 2019 ..............................

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.

16

AMANO Corporation and Subsidiaries

Consolidated Statement of Income, andConsolidated Statement of Comprehensive Income
For the year ended March 31, 2020

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 (Note 10) ..................
Loss on sale of fixed assets (Note 11) .........................
Gain on sale of investments in securities (Note 18)......
Impairment loss on fixed assets (Note 12)...................
Other, net .................................................................
Income before income taxes and non-controlling interests ......
Income taxes (Note 20):
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)

2020

2019

2020

¥133,084
73,362
59,721
43,552
16,168¥131,713
73,46758,24643,084
15,161$1,220,958
673,053
547,904
399,566
148,339

385
(102)
198
(93)
5
(39)
(194)
–
(198)
151
16,282

345
(29)
201
(15)
25
(26)
(1,145)
141
(220)
396
14,834

3,533
(936)
1,821
(855)
50
(365)
(1,784)–(1,817)
1,393
149,379

5,790
(241)
10,732(165)¥10,567

5,126
423
9,284
(142)
¥9,142

53,128(2,212)
98,463(1,518)$96,945

Consolidated Statement of Comprehensive Income
Millions of Yen

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

Thousands of U.S.dollars(Note 4)

2020

2019

2020

¥10,732¥9,284$98,463

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 ........................................................

(894)
(548)
(112)

(303)
(1,201)(30)(8,208)(5,028)(1,030)0(1,554)¥9,1770(1,535)¥7,7480(14,266)$84,197

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

¥8,966¥210¥7,615¥133$82,264$1,933

The accompanying notes are an integral part of these statements.

17

AMANO Corporation and Subsidiaries

Consolidated Statement of Changes in Net Assets
For the year ended March 31, 2020
Millions of Yen
Shareholders’ equity
Total shareholders’equity(¥4,220)¥109,178
0(4,220)109,178

Common stock

Capital surplus

Retained earnings

Balance at April 1, 2019
Cumulative effect of change in accounting principle
Restated balance at April 1, 2019
Changes during the year
Dividends from surplus
Officers’ bonuses by appropriation of retained earnings
Net income
Purchase of treasury stock
Net changes in items other than shareholders' equity
Total changes during the year

¥18,239¥19,293

18,23919,293¥75,866
075,866

–

–

4,338

(3)

4,334

Balance at March 31, 2020

¥18,239¥19,293¥80,204(¥4,224)¥113,512

Balance at April 1, 2019
Cumulative effect of change in accounting principle
Restated balance at April 1, 2019
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, 2020

(6,228)0
10,567(3)

1,921(4,189)(948)(3,216)

Total net assets

630¥106,592
0
106,592

(896)
(896)

(591)
(591)

(112)
(112)

(1,600)(1,600)152
152(6,228)
10,567(3)(1,447)2,886¥1,025(¥4,781)(¥1,061)(¥4,817)¥783¥109,478

Common stockThousands of U.S. dollars (Note 4)
Shareholders’ equity
Capital surplus Retained earnings Treasury stock Total shareholders’equity$177,001$696,022($38,721)$1,001,638
0
0
177,001
696,022(38,721)1,001,638$167,336––

Balance at March 31, 2020

$167,336$177,001

Balance at March 31, 2020

(6,228)0
10,567(3)

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)¥1,921(¥4,189)(¥948)(¥3,216)¥630

Balance at April 1, 2019
Cumulative effect of change in accounting principle
Restated balance at April 1, 2019
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 April 1, 2019
Cumulative effect of change in accounting principle
Restated balance at April 1, 2019
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

Treasury stock

167,336(57,146)(57,146)

96,945(35)

96,945(35)

39,799(35)

39,764$735,821($38,756)$1,041,401

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)$17,630($38,438)($8,705)($29,513)$5,786
17,630(38,438)(8,705)(29,513)

5,786

Total net assets$977,910
0977,911(57,146)(8,224)(8,224)(5,426)(5,426)(1,030)(1,030)(14,681)(14,681)

1,398
1,398

96,945(35)(13,282)
26,482$9,406($43,864)($9,736)($44,194)$7,185$1,004,392

18

Millions of Yen
Shareholders’ equity(1,892)

Total shareholders’equity¥106,780
70
106,851(2,328)(4,486)9,142(2,328)4,655(2,328)2,326¥75,866(¥4,220)¥109,178

Common stock

Capital surplus

Retained earnings

Treasury stock

Balance at April 1, 2018
Cumulative effect of change in accounting principle
Restated balance at April 1, 2018
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(¥1,892)

18,23919,293¥71,140
70
71,211––

Balance at March 31, 2019¥18,239¥19,293

Balance at April 1, 2018
Cumulative effect of change in accounting principle
Restated balance at April 1, 2018
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, 2019

(4,486)
9,142

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

(2,997)(917)(1,689)Total
net assets

543¥105,634
70
105,705

(303)
(303)

(1,192)(1,192)(30)(30)(1,527)(1,527)87
87(4,486)9,142(2,328)(1,439)886¥1,921(¥4,189)(¥948)(¥3,216)¥630¥106,592

The accompanying notes are an integral part of these statements.

19

AMANO Corporation and Subsidiaries

Consolidated Statement of Cash Flows
For the year ended March 31, 2020
Millions of Yen

Cash Flows from Operating Activities:
Income before income taxes and non-controlling interests ..........
Depreciation and amortization ............................................
Amortization of goodwill ....................................................
Impairment loss on fixed assets .............................................
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 .......................................................................
Payment for extra retirement payments ...............................
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 business acquisition .........................................
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 16).............................
The accompanying notes are an integral part of these statements.

20

Thousands of U.S.dollars(Note 4)

2020

2019

2020

¥16,282
7,310
547
198
114
13
(385)
(198)
102
39
189
39
–
3,727
387
(1,148)532
27,751
456
(101)
(29)
(5,114)249
23,211¥14,834
5,849
545
220
12
2
(345)
(201)
29
36
1,120
26
(141)
(1,948)
(595)
884
496
20,825
398
(29)
(30)
(5,473)28
15,719$149,379
67,070
5,020
1,817
1,046
122
(3,533)(1,821)
936
363
1,735
365
–
34,196
3,552(10,533)
4,885
254,599
4,188
(934)
(274)
(46,920)2,288
212,947(2,000)2,000(3,135)52(2,033)(56)–(4,090)
3,720
–
(163)
(5,706)(2,000)2,000(2,800)460(2,145)(905)
241(8,544)9,830(2,112)(156)(6,133)(18,349)
18,349(28,770)480(18,653)(514)–(37,525)
34,135–(1,503)(52,350)

716
(491)
(3)
(2,891)
1,215(6,228)(58)(7,741)(115)
9,647
42,487¥52,134

469(160)(2,328)(1,399)1,150(4,486)(46)(6,800)(528)
2,255
40,231¥42,487

6,573(4,509)(35)(26,524)
11,152(57,146)(534)(71,024)(1,063)88,510389,792$478,302

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”] and its subsidiaries have been prepared in accordance with the provisions set forth in
the Japanese Financial Instruments andExchange Act and its related accounting
regulations in Japan. The accounts of
the Company and domestic subsidiaries
included in the consolidation are basedon the accounting records maintained inaccordance with accounting principles
generally accepted in Japan, which are
different in certain respects as to theapplication 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 in yen
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 28 consolidated subsidiaries at March 31, 2020.
The accompanying consolidated financial statements include the accounts of
the Company 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.

With the establishment of a subsidiary,
Amano Vietnam CO., LTD., it was newly consolidated during the year ended
March 31, 2020.
The accounts of the overseas consolidated subsidiaries are consolidated using their financial statements as of theirrespective fiscal year end, which falls
on December 31, 2019 and necessary
adjustments are made to their financial
statements to reflect any significant
transactions from January 1 to March
31, 2020. All significant intercompany
balances and transactions have been
eliminated in consolidation.

(2) Accounting for Investments in
Unconsolidated Subsidiaries
and Affiliates
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.

21(3) Property, Plant andEquipment
Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed on the
declining balance method, based on theestimated useful lives, except for 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 computed on thestraightline method. The ranges of theuseful 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.

(4) Intangible Assets
Intangible assets are amortized using
the straight-line method. Software costs
for internal use are amortized by thestraight-line method over their expected
useful lives (five years). Software developed for external sale is amortizedover the estimated sales period, 3 years.
Goodwill is amortized over the estimated useful life, or where the amountof goodwill is immaterial, is charged toincome in the year of acquisition.

(5) Leased Assets
Leased assets in finance lease transactions not involving transfer of ownership are depreciated by the straight-line
method over the term of the lease, witha residual value of zero. Although someof its subsidiaries prepare the financial
statements based on IFRS, as describedin “Change in Accounting Policy”, wehave applied IFRS 16 “Leases” from thecurrent consolidated fiscal year. Accordingly, in principle, lessees recognize allleases on the balance sheet as assets
and liabilities, and depreciation of capi-talized leased assets is computed basedon straight-line method.

(6) Accounting for Financial
Instruments(a) Derivatives
All derivatives are stated at their fairvalues, with changes in fair value included in net profit or loss for the period in which they arise.
(b) Securities
Securities held by the Company and its
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 for in
the same manner as trading securities.
Held-to-maturity debt securities, that
the Company and its subsidiaries haveintent to hold to maturity, are stated attheir costs after accounting for any premium or discount on acquisition, which
are amortized over the period 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 are stated atcost 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 losses onthese securities are reported as a separate item in the net assets section at a
net-of-tax amount. Other securities forwhich market quotations are unavailable are stated at cost, except as statedin the paragraph below.

In cases where the fair value of held-tomaturity 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 or loss for theperiod.

(7) Foreign Currency Translation
Foreign currency transactions aretranslated using foreign exchange rates
prevailing at the respective transaction
dates. Receivables and payables inforeign currencies are translated at theforeign exchange rates prevailing at therespective balance sheet dates and theresulting transaction gains or losses areincluded 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 prescribedby the Business Accounting Deliberation
Council of Japan.
All the balance sheet accounts of foreignsubsidiaries and affiliates are translated
at the foreign exchange rates prevailingat the respective balance sheet dates except for common stock and capital surplus. On the other hand, all the profit
and loss accounts are translated at the
average foreign exchange rates for therespective periods. Differences arisingfrom translation are presented as “Foreign currency translation adjustments”
and “Non-controlling interests in consolidated subsidiaries” in the accompanying consolidated financial statements.

22(9) Income Taxes
The Company recognizes the tax effectof temporary differences between the
carrying amounts and the tax basis ofassets and liabilities. The provision forincome taxes is computed based on thepretax income included in the consolidated statement of income. The asset
and liability approach is used to recognize deferred tax assets and liabilities
for the expected future tax consequences of temporary differences.

(10) A llowance for Doubtful
Accounts
In general, the Company and its subsidiaries provide the allowance based on
the past receivables loss experience fora certain reference period. Furthermore,
for receivables from companies withfinancial difficulty, which could affectthe debtors’ ability to perform their
obligations, the allowance is provided
for estimated unrecoverable amounts
individually.

(11) Retirement Benefits
The Company and some of its subsidiaries recognize accrued pension andseverance costs to employees based on
the actuarial valuation of projected benefit obligation and plan assets at theirvalue. The retirement benefit obligation for employees is attributed to eachperiod by the benefit formula method.
Prior service costs are amortized basedon the straight-line method over a period years(7-10years). Actuarial gains
and losses are amortized based on thestraight-line method over a period years(7-10years) starting from the beginningof 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 the balance sheet date are based on an estimate of the amounts to be paid as bonuses for services rendered by directors
by that date.

(14) Provision for stock benefit
In order to prepare for the payment ofcompany stocks to employees under
the stock benefit program, provision
for stock benefit is recorded based on
the estimated amount of stock benefit
obligation corresponding to the merit
points allocated to the employees in thecurrent consolidated fiscal year.

(15) Provision for directors’ stock
benefit
In order to prepare for the paymentof the Company stocks to officers anddirectors under the share payment program, provision for stock benefit is recorded based on the estimated amountof stock benefit obligation corresponding to the merit points allocated to theofficers and directors in the current consolidated fiscal year.

(16) Research and Development
Expenses
Research and development expenses arecharged to income as incurred.

(17) Net Income and Dividends
per Share
Basic net income per share is computed based on the net income and theweighted average number of shares ofcommon stock outstanding during eachperiod. Diluted net income per shareis computed based on the net income
available for distribution to the shareholders and the weighted-average num-bers of shares of common stock outstanding during each year after giving
effect to the dilutive potential of sharesof common stock to be issued upon theexercise of stock subscription rights andstock options. Cash dividends per share
shown for each fiscal period in the accompanying consolidated statement ofincome represent actual dividends declared as applicable to a common stockduring the respective fiscal period.

(18) Revenue from Construction
Contracts
Revenues and costs of construction
contracts are recognized by the percentage of completion 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 for eachcontract. The completed-contract method is applied to the contracts in casethe percentage of completion cannot be
reliably estimated.

(19) Accounting for Consumption
Taxes
Transactions subject to consumption
taxes are recorded at amounts exclusiveof consumption taxes.

(20) Change in Accounting Policy(Application of IFRS 16 “Leases”) For
those of subsidiaries that are subject
to IFRS accounting, we have applied
IFRS 16 “Leases” from the current consolidated fiscal year. Accordingly, inprinciple, lessees recognize all leases on
the consolidated balance sheet as assets
and liabilities. In adopting this accounting standard, we applied the permitted
transitional measure whereby the cumulative effect when applying this standard, is recognized on the effective dateof application. As a result, compared23

with the previous accounting standard,
the balance of lease assets increased by¥2,456 million, lease obligations undercurrent liabilities by ¥1,028 million, andlease obligations under long-term liabilities by ¥1,214 million, while the balanceof other current assets under current assets decreased by ¥74 million and other
under investments and other assets by¥140 million at the beginning of the current fiscal year. The effect this change
has on our profits and losses during thecurrent fiscal year is negligible.

(21) A ccounting standard issued
but not yet effective(Accounting Standard and Implementation Guidance on Revenue Recognition)
On March 31, 2020, the ASBJ issued“Accounting Standard for Revenue Recognition” (ASBJ Statement No.29) and “Implementation Guidance on Accounting Standard for Revenue Recognition ”(ASBJ Guidance No.30).
(1) Overview
This is a comprehensive accounting
standard addressing revenue recognition. Specifically, the accounting standard establishes the following five-stepmodel that will apply to revenue fromcontracts with customers:
Step 1:Identify the contract(s) with acustomer
Step 2:Identify the performance obligations in the contract
Step 3:Determine the transaction price
Step 4:Allocate the transaction price tothe performance obligations in
the contract
Step 5:Recognize revenue when (or as)
the entity satisfies a performanceobligation(2) Scheduled date of adoption
The Company expects to adopt the accounting standard and implementation
guidance from the beginning of the fiscal year ending March 31, 2022.

(3) Impact of adoption of accounting
standard and implementation guidance
The Company is currently evaluating
the effect of the adoption of this accounting standard and implementation
guidance on its consolidated financial
statements.
(Accounting Standard for Fair Value
Measurement and Related Implementation Guidance)
On July 4, 2019, the Accounting Standards Board of Japan (ASBJ) issued“Accounting Standard for Fair Value
Measurement ” (ASBJ Statement No.
30), and “Implementation Guidanceon Accounting Standard for Fair Value
Measurement ” (ASBJ Guidance No.
31), along with related updates to “Accounting Standard for Measurement of
Inventories” (ASBJ Statement No. 9),
and “Accounting Standard for Financial
Instruments” (ASBJ Statement No. 10).
(1) Overview
The ASBJ has developed an “Accounting Standard for Fair Value Measurement” and “Implementation Guidanceon Accounting Standard for Fair Value
Measurement” (hereinafter collectively,
the “Fair Value Measurement Standard”), which provide guidance for fairvalue measurement in order to improvecomparability with internationally recognized accounting standards. The Fair
Value Measurement Standard is appliedwith respect to the fair value of the following items;·Financial instruments defined in “Accounting Standard for Financial Instruments”·Inventories held for trading purposes
defined in “Accounting Standard for
Measurement of Inventories”
In addition, the ASBJ has revised “Implementation Guidance on Disclosuresabout Fair Value of Financial Instruments” (ASBJ Guidance No. 31), which
newly requires the disclosure for break-down of financial instruments by thefair value hierarchy.
(2) Scheduled date of adoption
The Company expects to adopt the accounting standards and related implementation guidance from the beginningof the fiscal year ending March 31,
2022.
(3) Impact of adoption of revised accounting standard and related implementation guidance
The Company is currently evaluating
the effect of the adoption of the accounting standards and related implementation guidance on its consolidated
financial statements.
(Accounting Standard for Accounting
Policy Disclosures, Accounting Changes
and Error Corrections)
On March 31, 2020, the ASBJ issued therevised “Accounting Standard for Accounting Policy Disclosures, Accounting
Changes and Error Corrections” (ASBJ
Statement No.24)(1) Overview
This accounting standard has beenreleased to provide an outline of the applicable accounting principles and procedures in cases where directly relevant
accounting standards are not available.
(2) Scheduled date of adoption
The Company expects to adopt the accounting standard from the end of the
fiscal year ending March 31, 2021.
(Accounting Standard for Disclosure of
Accounting Estimates)
On March 31, 2020, the ASBJ issued the“Accounting Standard for Disclosure of
Accounting Estimates” (ASBJ Statement
No.31)(1) Overview
This accounting standard has beenreleased to provide guidance on disclosure of information that deepens theunderstanding of users of the financial
statements about estimates that embody
a risk of a significant impact on the24

financial statements of the following accounting period.
(2) Scheduled date of adoption
The Company expects to adopt the accounting standard from the end of the
fiscal year ending March 31, 2021.

(22) Additional Information(Directors’ Compensation BIP Trust and
Employee Stock Ownership Plan (J-ESOP)) For the purpose of enhancing the
motivation to contribute the improvement of mediumto long-term businessperformance and to increase the corporate value, Amano Corporation andsome of its subsidiaries have introduced
the Compensation BIP Trust system fordirectors(excluding external directors and directors residing overseas) and operating
officers (excluding officers residing
overseas), as well as the Employee
Stock Ownership Plan (J-ESOP) systemfor employees who meet the prescribed
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 beprovided 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 the attainment level of numerical targets of performance indicators, stocks of Amano
Corporation are provided by the trust to
directors and operating officers. Under
the Employee Stock Ownership Plan (JESOP), in accordance with the stock
distribution rules and based on points
granted according to their positions andoperating 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 that remain in the trust are recorded as treasury stock in the net assets section withthe book value of the trust (excluding
incidental expenses). The book value
and the numbers of the treasury stock
at March 31, 2020 are ¥827 million and
314,300 shares, respectively. (The corresponding measures and accounting
estimate for the spread of COVID-19
infection) As an effort to ensure thehealth and safety of employees, The
Company and its domestic group companies have adopted flexible work suchas telework(work from home), workon a rotating, and staggered working
hours. Overseas group companies takemeasures in accordance with instructions such as curfew regarding in the
countries or states where they are located, and when they are located in thearea where the curfew is issued, theygenerally work from home.
As for our factory operations, domestic
factory workers are working in shifts
to maintain operations. On the other
hand, U.S. factories are operating in accordance with the enforcements issued
by their respective state authorities andhas stopped production of certain items.
Other items are in production either
normally or by minimum staffing.
We have reflected the effects of COVID-19 in our full-year forecast as
much as possible. Our group companies makes accounting estimates for
impairment loss on fixed assets anddeferred tax assets recoverability basedon information available at the time of
preparation of the consolidated financial statements. Although the impact
and severity of COVID-19 infection on
the Company and its subsidiaries will
differ depending on the business, it isassumed that the impact would be large

in the first half of the fiscal year ending
March 2021 and would improve gradually after the second half, although
the impact will remain. Even if theinfection is once settled, if the global
economic downturn is prolonged dueto the spread of the infection by thesecond and third waves, the demandfor our products and services would
decrease. Since business activities arealso restricted, it may have a significant
impact on the consolidated financial
statements for the period ending March
2021.

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 there
to represent the arithmetical results oftranslating Japanese yen to U.S. dollars
at a rate of ¥ 109= US$1, the approximate effective rate of exchange prevailing on March 31, 2020. The inclusion of
U.S. dollar amounts is solely for convenience of readers outside Japan and is
not intended to imply that yen 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, 2020 and 2019 is as follows:
Millions of Yen

Investments in equity securities
Others………………………………

2020¥2,02453

Thousands of U.S.dollars ( Note 4 )2019¥1,89353

2020$18,569486

6. Assets Pledged as Collateral and Obligations Secured by Collateral
As at March 31, 2020 and 2019, the following assets were pledged as collateral:
Millions of Yen

Cash and bank deposits…………

2020
¥8

Thousands of U.S.dollars ( Note 4 )

2019
¥8

2020
$73

7. Notes and Accounts Receivable
The Company recognizes settlements of trade notes receivable when the banks actually clear the notes.
As March 31, 2020 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, 2020.
Millions of Yen

2020
Trade notes receivable…………

Thousands of U.S.dollars ( Note 4 )

2019
¥226

–

2020
–

8. Selling, General and Administrative Expenses
Selling, general and administrative expenses during the years ended March 31, 2020 and 2019 principally include:
Millions of Yen

Employees' bonuses………………
Directors' bonuses…………………
Retirement benefits…………………
Salaries and allowances……………
Allowance for doubtful accounts……
Allowance for Provision for stock benefit……
Allowance for Provision for directors’ stock benefit……

2020¥2,055130
1,098
19,053
253
85
85

2019
¥1,699130
1,093
18,90698
79
88

Thousands of U.S.dollars ( Note 4 )2020$18,853
1,193
10,073
174,798
2,321
780
780

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, 2020 and 2019 are as follows:
Millions of Yen

Research and development costs……

2020¥1,7882019¥1,64926

Thousands of U.S.dollars ( Note 4 )2020$16,40410. Loss on disposal of fixed assets
Details of Loss on disposal of fixed assets for the years ended March 31, 2020 and 2019 are as follows:
Millions of Yen

Buildings and structures…………
Machinery and equipment………
Tools, Furniture and Fixtures………
Leased Assets……………………
Software……………………………
Total………………………………

2020
¥13
1
13
10
0
¥39

Thousands of U.S.dollars ( Note 4 )

2020
$119
9
119
92
0
$365

2019
¥2
1
11
3
7
¥26

11. Loss on sale of fixed assets
Details of Loss on sale of fixed assets for the years ended March 31, 2020 and 2019 are as follows:
Millions of Yen

Buildings and structures…………
Machinery and equipment………
Tools, Furniture and Fixtures………
Land………………………………
Total………………………………

2020
¥12
0
0
182
¥194

Thousands of U.S.dollars ( Note 4 )

2020
$110
0
0
1,670
$1,784

2019
¥357
1
5
780
¥1,145

12. Impairment Loss on Fixed Assets
Impairment loss on fixed assets for the year ended March 31, 2020 is as follows:
Location

Purpose of use

Amano McGann, Inc. (U.S.A.)

Business use

Category

Millions of Yen
2020
¥198

GoodwillThousands of
U.S. dollars ( Note 4 )2020$1,817

Method to Group Assets:
The Company and its subsidiaries group assets according to minimum units that generate cash flows essentially independent
from the cash flows of other assets or groups of assets.
Recognition of Impairment Loss:As the forecasted profit was not expected due to poor performance, the book values of above groups of assets were reduced to therecoverable amounts, and the reductions were recognized as impairment losses.
Calculation of Recoverable Amount:
The recoverable amount for said assets is reasonably estimated based on the value in use, which was determined to be zero as no
future cash flow is expected.
Impairment loss on fixed assets for the year ended March 31, 2019 is as follows:
Location
Amano McGann, Inc. (U.S.A.)

Purpose of use
Business use

Category

Millions of Yen

Other intangible fixed assets

2020
¥141

Buildings and structures

78

Thousands of
U.S. dollars ( Note 4 )2020$1,270703

Method to Group Assets:
The Company and its subsidiaries group assets according to minimum units that generate cash flows essentially independent
from the cash flows of other assets or groups of assets.
Recognition of Impairment Loss:As the forecasted profit was not expected due to poor performance, the book values of above groups of assets were reduced to therecoverable amounts, and the reductions were recognized as impairment losses based on US-GAAP.
Calculation of Recoverable Amount:
The recoverable amount for said assets is reasonably estimated based on the value in use, which was determined to be zero as no
future cash flow is expected.
27

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, 2020 and 2019:2020(¥1,285)(5)(1,290)
395
(894)

2019
(¥140)
(141)
(282)
(21)
(303)

Thousands of U.S.dollars( Note 4 )2020($11,789)(46)(11,835)
3,624(8,208)

(548)
–
(548)
–
(548)

(1,201)–(1,201)–(1,201)(5,028)–(5,028)–(5,028)

(365)
207
(158)
45
(112)

(300)
256
(44)
13
(30)

(3,349)1,899(1,450)413(1,030)

0
–

0
–

0
–

0
(¥1,554)0(¥1,535)

0($14,266)

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) ……………………………………

28

14. Changes in Shareholders’ Equity
Changes in "Shares issued and outstanding" and "Shares of treasury stock" during the period from April 1, 2019 to March 31,
2020 are as follows:(1) Shares issued and outstanding
Share type
Common stock (shares)

As of April 1, 201976,657,829

Increase–

Decrease–

As of March 31, 2020
76,657,829(2) Shares of treasury stock
Share type
As of April 1, 2019
Increase
Decrease
As of March 31, 2020
Common stock (shares)
1,924,625
1,276–
1,925,901(Reason for change)
The increase in the number of shares is due to the purchases of 1,276 shares less than one unit.
Changes in "Shares issued and outstanding" and "Shares of treasury stock" during the period from April 1, 2018 to March 31, 2019 are as follows:(1) Shares issued and outstanding
Share type
As of April 1, 2018
Increase
Decrease
As of March 31, 2019
Common stock (shares)
76,657,829––
76,657,829(2) Shares of treasury stock
Share type
As of April 1, 2018
Increase
Decrease
As of March 31, 2019
Common stock (shares)
923,9031,000,722–
1,924,625(Reason for change)
The increase in the number of shares is due to the purchases of 722 shares less than one unit.
The increase in the number of shares is due to the purchases of 1,000,000 shares by a resolution of the Board of Directors meeting held on October 29, 2018.

15. Dividends
Information on dividends for the fiscal year ended March 31, 2020 is as follows:(1) Dividends paid
Total dividend Total dividend Dividend per share Dividend per share Date of record Effective date(Millions of Yen) (Thousands of U.S.dollars)(Yen)(U.S.dollars)
Ordinary general meeting of shareholders, Common stock
March 31,
¥4,127$37,868¥55$0.505June 28, 2019
June 27, 20192019
Board of directors meeting,
September
30,
December 3,
Common stock¥2,101$19,278¥28$0.257
October 28, 2019
2019
2019
(NOTES)"Total dividend" as determined by the Ordinary general meeting of shareholders' resolution on June 27, 2019 includes ¥ 9 million for dividends on the Company's shares owned by Directors' Compensation BIP Trust and ¥ 8 million for dividends on our shares owned by Employee Stock Ownership Plan (J-ESOP).
"Total dividend" as determined by the Board of Directors' resolution on October 28, 2019 includes ¥ 4 million for dividends on the Company's shares owned
by Directors' Compensation BIP Trust and ¥ 4 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
29,¥4,202$38,550¥56$0.514
March 31, 2020 June
June 26, 2020
stock
earnings
2020(NOTES)“Total dividend” as determined by the Ordinary general meeting of shareholders’ resolution on June 27, 2019 includes ¥ 9 million for dividends on the Company’s shares owned by Directors’ Compensation BIP Trust and ¥ 8 million for dividends on our shares owned by Employee Stock Ownership Plan (J-ESOP).
Resolution

Share type

Information on dividends for the fiscal year ended March 31, 2019 is as follows:(1) Dividends paid
Resolution

Share type

Total dividend(Millions of Yen)

Total dividend
Dividend per share Dividend per share Date of record(Thousands of U.S. dollars)(Yen)(U.S. dollars)
March 31,¥23,297¥34$0.3062018
September 30,¥17,128¥25$0.2252018

Effective dateOrdinary general meeting of shareholders, Common stock
June 29,¥2,585June 28, 20182018
December 4,
Board of directors meeting,Commonstock¥1,901
2018
October 29, 2018
(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).
"Total dividend" as determined by the Board of Directors' resolution on October 29, 2018 includes ¥ 4 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.
Dividend
Total dividend
Total dividend
Dividend per share Dividend per share Date of record Effective date
Resolution
Share typefunding(Millions of Yen) (Thousands of U.S. dollars)(Yen)(U.S. dollars)
Ordinary general meeting of shareholders,CommonRetained
March 31,
June 28,¥4,127$37,180¥55$0.495June 27, 2019stock
earnings
2019
2019(NOTES)"Total dividend" as determined by the Ordinary general meeting of shareholders' resolution on June 27, 2019 includes ¥ 9 million for dividends on the Company's shares owned by Directors' Compensation BIP Trust and ¥ 8 million for dividends on our shares owned by Employee Stock Ownership Plan (J-ESOP).

29

16. Cash and Cash Equivalents
Reconciliations of cash and cash equivalents to the amounts shown in the consolidated balance sheet as at March 31, 2020 and2019 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……………………………

2020¥54,973
1,743
56,717(3,582)(1,000)¥52,134

2019¥45,558
1,184
46,742(3,255)(1,000)¥42,487

Thousands of U.S.dollars( Note 4 )2020$504,342
15,998520,340(32,864)(9,174)$478,302(Supplemental disclosure of non-cash transactions)
The significant non-cash transactions for the years ended March 31, 2020 and 2019 are as follows:
Millions of Yen
Leased assets…………………………………………
Lease obligations………………………………………

2020¥3,613
4,331

2019
¥884
1,112

Thousands of U.S.dollars( Note 4 )2020$33,147
39,734

17. Lease Commitments(1) Lessees’ accounting
Minimum future lease payments under operating leases subsequent to March 31, 2020 and 2019 for non-cancelable operatingleases are summarized as follows:
Millions of Yen
Due within 1 year…………………
Due over 1 year……………………
Total…………………………………

2020
¥69
261
¥331

2019
¥1,321
1,094¥2,415

Thousands of U.S.dollars ( Note 4 )
2020
$633
2,394
$3,037(2) Lessors’ accounting
Minimum future lease income under operating leases subsequent to March 31, 2020 and 2019 for non-cancelable operatingleases is summarized as follows:
Millions of Yen
Due within 1 year…………………
Due over 1 year……………………
Total…………………………………

2020
¥101
401
¥502

2019
¥101
502
¥604

30

Thousands of U.S.dollars ( Note 4 )
2020
$927
3,679
$4,606

18. 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, 2020 and 2019 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-maturity……………………………
② Subsidiaries and affiliates…………………
③ 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-maturity……………………………
② Subsidiaries and affiliates…………………
③ Other securities………………………………
Total (Assets)…………………………………
(4) Trade notes and accounts payable……………
(5) Electronically recorded monetary claims……
Total (Liabilities)……………………………

Carrying
value¥54,973
31,392
1,651
1,976
6,673
¥96,667¥6,2106,845¥13,056

Carrying
value¥45,558
35,367
1,651
1,843
7,402
¥91,823¥7,264
7,015¥14,279

Millions of Yen
2020
Estimated
Difference
fair value
in amounts¥54,973–
31,392
–
1,646
2,682
6,673
¥97,368¥6,2106,845¥13,056

(¥5)
705
–
¥700
–
–
–

Millions of Yen
2019
Estimated
Difference
fair value
in amounts¥45,558–
35,367
–
1,649
3,261
7,402
¥93,239¥7,264
7,015¥14,279

31

(¥1)
1,417
–
¥1,415–––

Thousands of U.S.dollars ( Note 4 )2020
Carrying
Estimated
Difference
value
fair value
in amounts$504,342$504,342–
288,009
288,009–
15,147
18,12861,220$886,853$56,979
62,804$119,780

15,101
24,606
61,220$893,284$56,979
62,804$119,780

($46)
6,468
–
$6,422–––

(NOTES)(*1): Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivativetransactions.
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, 2020 and 2019.
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)

2020
¥271

2019
¥333

Thousands of U.S.dollars ( Note 4 )2020$2,486The 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…………………………

Millions of Yen
2020
Due after 1 year
Due after 5 years
but within 5 years
but within 10 years
–
–
–
–

Due
within 1 year
¥54,973
31,392
1,000¥87,366

–
–

¥651
¥651

Millions of Yen
2019
Due after 1 year
Due after 5 years
but within 5 years
but within 10 years
–
–
–
–

Due
within 1 year
¥45,558
35,3671,000¥81,926

–
–

¥651
¥651

Thousands of U.S.dollars ( Note 4 )2020
Due after 1 year
Due after 5 years
but within 5 years
but within 10 years
–
–
–
–

Due
within 1 year
$504,342
288,009
9,174$801,523––

32$5,972$5,972Due
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–
¥2,641¥2,641The 2 years–¥1,820¥1,820Millions of Yen
2020
The 3 years
The 4 years––¥1,274¥537¥1,274¥537

The 5 years
–
¥317
¥317

Thereafter
–
¥545
¥545

Millions of Yen
Long-term loans payable…………………
Lease obligations …………………………
		
Total…………………

Long-term loans payable…………………
Lease obligations…………………………
		
Total…………………

The 3 years
–
¥623
¥623

2019

Due within 1 year–
¥1,105¥1,105The 2 years
–
¥909
¥909

The 4 years
–
¥394
¥394

The 5 years
–
¥220
¥220

Thereafter
–
¥206
¥206

Due within 1 year–
$24,236$24,236

Thousands of U.S.dollars ( Note 4 )2020
The 2 years
The 3 years
The 4 years
The 5 years––––$16,699$11,694$4,936$2,910$16,699$11,694$4,936$2,910

Thereafter–$5,007$5,007(*5) Held-to-maturity and other securities with readily determinable fair value as at March 31, 2020 and 2019 are as follows:
Millions of Yen
2020
Fair value

Unrealized
gains (losses)

–

–

–

–

–

–

¥1,651¥1,646(¥5)$15,147$15,101($46)¥1,651¥1,646(¥5)$15,147$15,101($46)

Carrying value

Acquisition
cost

Unrealized
gains (losses)

Carrying value

Acquisition
cost

Unrealized
gains (losses)¥4,200743
4,944¥2,229738
2,967¥1,9715
1,976$38,532
6,817
45,358$20,450
6,771
27,220$18,083
46
18,128

1,729
–
1,729
¥6,673

2,227
–
2,227
¥5,195

(498)
–
(498)
¥1,47815,862–
15,862$61,220

20,431–
20,431$47,661(4,569)–(4,569)$13,560

Carrying
value

Millions of Yen
2019
Fair
value

Carrying value
Held-to-maturity securities with fair……
value exceeding carrying value
Held-to-maturity securities with fair……
value not exceeding carrying value
		Total……………………………

Other securities with carrying
value exceeding acquisition cost
Stocks………………………………
Other…………………………………
		Subtotal…………………………
Other securities with carrying
value not exceeding acquisition cost
Stocks………………………………
Other…………………………………
		Subtotal…………………………
		Total……………………………

Held-to-maturity securities with fairvalue exceeding carrying value…………
Held-to-maturity securities with fairvalue not exceeding carrying value……
		Total……………………………

Other securities with carrying
value exceeding acquisition cost
Stocks………………………………
Other…………………………………
		Subtotal…………………………
Other securities with carrying
value not exceeding acquisition cost
Stocks………………………………
Other…………………………………
		Subtotal…………………………
		Total……………………………

Thousands of U.S.dollars ( Note 4 )2020
Unrealized
Carrying value
Fair value
gains (losses)

Unrealized
gains (losses)

¥201

¥201

¥0

¥1,450¥1,448(¥2)¥1,651¥1,649(¥1)

Carrying
value

Acquisition
cost

Unrealized
gains (losses)¥6,505
184
6,689¥3,650181
3,832¥2,854
2
2,857

712
–
712
¥7,402799–
799¥4,632(87)–(87)¥2,76933

(*6) Other securities sold for the year ended March 31, 2019 as follows:

Stocks…………………………………
		Total………………………………

Millions of Yen
2019
Total amount of Total amount ofSales amountloss on salegain on sale
¥241
¥141
¥0
¥241
¥141
¥0

34

Thousands of U.S.dollars ( Note 4 )2019Total amount of Total amount ofSales amountloss on salegain on sale
$2,176$1,274$0$2,176$1,274$0

19. Retirement Benefits
Outline of the retirement benefit plans adopted(1) D efined 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) D efined contribution pension scheme: From March 1, 2009, the Company adopted a defined contribution pension schemeas part of its retirement benefit plan.
(3) E mployees' 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 theretirement benefit expenses, and assets and liabilities for retirement benefits by means of a simplified method.
The changes in the retirement benefit obligation for the years ended March 31, 2020 and 2019 are as follows:
Millions of Yen
2020¥13,458
990
52
(16)
(705)
–
(39)
¥13,739

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 year……………………………………

2019¥12,926
937
58
265
(676)
–
(53)
¥13,458

Thousands of U.S.dollars( Note 4 )2020$123,468
9,083
477
(147)
(6,468)–(358)$126,046

The changes in plan assets for the years ended March 31, 2020 and 2019 are as follows:
Millions of Yen
2020¥11,168
276
(382)
738
(583)
(16)
¥11,201

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……………………………………

35

2019
¥10,661
264
(65)
909
(580)
(21)
¥11,168

Thousands of U.S.dollars( Note 4 )2020$102,459
2,532(3,505)
6,771(5,349)(147)$102,761

The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheet as ofMarch 31, 2020 and 2019 for the Company's and the consolidated subsidiaries' defined benefits plans:

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

2020¥13,656(11,201)
2,454
83
2,537

2019
¥13,360(11,168)
2,191
97
2,289

Thousands of U.S.dollars( Note 4 )2020$125,284(102,761)
22,514761
23,275

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

2,537–¥2,5372,289–¥2,28923,275–$23,275

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

The components of retirement benefit expense for the years ended March 31, 2020 and 2019 are as follows:
Millions of Yen
2020
¥990
52
(276)
207
–
¥973

Service cost………………………………………………………
Interest cost………………………………………………………
Expected return on plan assets………………………………
Amortization of actuarial loss…………………………………
Amortization of prior service cost……………………………
Retirement benefit expense……………………………………

2019
¥937
58
(264)
289
(3)
¥1,017

Thousands of U.S.dollars( Note 4 )2020$9,083477(2,532)
1,899–$8,927The components of retirement benefits liability adjustments included in other comprehensive income (before tax effect) for theyears ended March 31, 2020 and 2019 are as follows:
Thousands of U.S.dollars
Millions of Yen

2020
–
(158)
(¥158)

Prior service cost …………………………………………………
Actuarial loss (gain)……………………………………………
Total………………………………………………………………

2019
(¥3)
(41)
(¥44)

( Note 4 )2020–(1,450)($1,450)

The components of retirement benefits liability adjustments included in accumulated other comprehensive income (before tax
effect) as of March 31, 2020 and 2019 are as follows:
Thousands of U.S.dollars
Millions of Yen

Unrecognized prior service cost…………………………………
Unrecognized actuarial loss……………………………………
Total………………………………………………………………

2020–(1,524)(¥1,524)2019–(1,366)(¥1,366)( Note 4 )2020–(13,982)($13,982)

The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2020 and 2019 is as follows:
Millions of Yen
2020
2019
13%
12%
55%
54%
11%
13%
21%
21%
100%
100%

General accounts…………………………………………………
Bonds………………………………………………………………
Stocks……………………………………………………………
Other………………………………………………………………
Total………………………………………………………………

The expected return on plan assets has been estimated based on the anticipated allocation to each asset class and the expectedlong-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.
2020
0.7%
2.5%
5.0%

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

36

2019
0.6%
2.5%
5.0%

For defined benefit plans to which the simplified method is applied, the changes in the retirement benefit obligation for the years
ended March 31, 2020 and 2019 are as follows:
Millions of Yen
2020
¥85
55
(15)
(23)
(0)
¥102

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

2019
¥84
45
(19)
(24)
(0)
¥85

Thousands of U.S.dollars( Note 4 )
2020
$780
505
(138)
(211)
(0)
$936

The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheet as ofMarch 31, 2020 and 2019 for the Company's and the consolidated subsidiaries' defined benefits plans:

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

2020
¥265
(312)
(47)
149
102

2019
¥247
(296)
(48)
134
85

Thousands of U.S.dollars( Note 4 )2020$2,431(2,862)
(431)
1,367
936

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

198
(96)
¥102

188
(102)
¥85

1,817
(881)
$936

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, 2020 and 2019 are as follows:
Millions of Yen
2020
¥55

Retirement benefit expenses………………………………………

2019
¥45

Thousands of U.S.dollars( Note 4 )
2020
$505

Contributions to defined contribution plans of the Company and its consolidated subsidiaries for the years ended March 31,
2020 and 2019 are as follows:
Millions of Yen
2020
¥582

Contributions to defined contribution plans………………………

37

2019
¥581

Thousands of U.S.dollars( Note 4 )2020$5,33920. Income Taxes
Deferred tax assets and liabilities (both current and non-current) as at March 31, 2020 and 2019 consisted of the following elements:
Millions of Yen

Thousands of U.S.dollars(Note 4)

2020

2019

2020

Deferred tax assets:
Accrued enterprise tax …………………………………………………………………
Accrued employees' bonuses…………………………………………………………
Net liability for retirement benefits……………………………………………………
Loss carried forward (* 2)………………………………………………………………
Loss on write-down of investments in securities……………………………………
Surplus on allowance for doubtful accounts…………………………………………
Unrealized gains…………………………………………………………………………
Others……………………………………………………………………………………
Subtotal deferred tax assets………………………………………………………
Less: valuation allowance for tax loss carryforwards(* 2)…………………………
Less: valuation allowance for deductible temporary difference……………………
Subtotal valuation allowance(* 1)………………………………………………
Total deferred tax assets……………………………………………………………

¥198
873
808
1,525
326
172
535
1,387
¥5,826(1,392)(891)(2,284)¥3,542

¥177
840
734
1,306
228
136
555
1,246
¥5,225(1,185)(856)(2,041)¥3,184$1,817
8,009
7,413
13,991
2,991
1,578
4,908
12,725$53,450(12,771)(8,174)(20,954)$32,495

Deferred tax liabilities:
Reserve for advanced depreciation of building ……………………………………
Unrealized loss on other securities……………………………………………………
Others……………………………………………………………………………………
Total deferred tax liabilities………………………………………………………
Net deferred tax assets……………………………………………………………

–
(438)
(155)
(593)
¥2,949

–
(769)
(137)
(907)
¥2,276–(4,018)(1,422)(5,440)$27,055(NOTES)(* 1): V aluation allowance increased by ¥ 242 million. While valuation allowance of a consolidated subsidiary in Europe decreased by ¥ 38
million, valuation allowance of a consolidated subsidiary in North America increased by ¥ 280 million.
(* 2): A breakdown of net operating loss carryforwards and valuation allowance by expiry date as of March 31, 2020 is as follows:
Millions of Yen
2020
Due in 1 Yearor Less
Net operating loss carryforwards (a)……
Valuation allowance……………
Deferred tax assets………………

–––Due after
1 Year through2 Years–––

Due after
2 Years through3 Years–––

Due after
3 Years through4 Years–––

Due after
4 Years through5 Years–––

Due after
5 Years

Total¥1,525(1,392)¥132¥1,525(1,392)¥132(b)

Due after
5 Years

Total$13,991(12,771)$1,211$13,991(12,771)$1,211(b)

Thousands of U.S. dollars ( Note 4 )2020
Due in One Yearor Less
Net operating loss carryforwards (a)……
Valuation allowance……………
Deferred tax assets………………

–––Due after
1 Year through2 Years–––

Due after
2 Years through3 Years–––

Due after
3 Years through4 Years–––

Due after
4 Years through5 Years–––(a): The amount is determined by multiplying the corresponding net operating loss carryforwards by the effective statutory tax rate.
(b): Deferred tax assets of ¥ 132 million are related to tax loss carryforwards of ¥ 1,525 million. The tax loss carryforwards for which theCompany recognized deferred tax assets are determined to be recoverable by expected future taxable income.

38

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……………………………………………………
Others……………………………………………………………………………………
Actual tax rate……………………………………………………………………

39

2020
30.6%

2019
30.6%

0.6
(2.7)
0.6
0.7
3.2
(0.7)
(0.2)
2.6

0.7
(2.7)
0.6
0.7
3.1
(0.8)
(0.3)
5.9

–

–

(0.7)
(0.4)
0.5
34.1%

(0.3)
(0.4)
0.3
37.4%

21. 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
2020
Reportable segments
Time information Environment
Total
system business system businessNet sales:
Sales to third parties………………………………
Intersegment sales and transfers…………………
		Total…………………………………
Segment profit or loss………………………………
Segment assets………………………………………
Depreciation and amortization……………………
Investment in equity-method affiliates……………
Increase in tangible and intangible fixed assets……

¥100,016–
100,016
15,65870,853
6,103
1,976
6,851

¥33,068–
33,068
4,756
24,939578–
416¥133,084–
133,084
20,415
95,792
6,681
1,976
7,267

Adjustments/
Eliminations

Consolidated–––(¥4,246)
58,484628–
953¥133,084–
133,084
16,168154,276
7,310
1,976
8,221

Adjustments/
Eliminations

Consolidated–––(¥4,049)
47,107577–
547¥131,713–
131,713
15,161
147,609
5,849
1,843
5,081

Millions of Yen
2019
Reportable segments
Time information
Environment
system business system businessNet sales:
Sales to third parties………………………………
Intersegment sales and transfers…………………
		Total…………………………………
Segment profit or loss………………………………
Segment assets………………………………………
Depreciation and amortization……………………
Investment in equity-method affiliates……………
Increase in tangible and intangible fixed assets……

¥96,665–
96,665
13,59071,224
4,706
1,843
4,020

¥35,047–
35,047
5,621
29,277
565
–
513

Total
¥131,713–
131,713
19,211
100,501
5,271
1,843
4,534

Thousands of U.S. dollars (Note 4)
2020
Reportable segments
Adjustments/
Time information Environment
Eliminations
Total
system business system businessNet sales:
Sales to third parties………………………………
Intersegment sales and transfers…………………
		Total…………………………………
Segment profit or loss………………………………
Segment assets………………………………………
Depreciation and amortization……………………
Investment in equity-method affiliates……………
Increase in tangible and intangible fixed assets……

$917,579–
917,579
143,656
650,028
55,99618,13262,855$303,379–
303,379
43,641
228,801
5,304
–
3,823

40

$1,220,958–
1,220,958
187,297
878,828
61,30018,132
66,679–––($38,959)
536,557
5,770
–
8,744

Consolidated$1,220,958–
1,220,958
148,339
1,415,385
67,07018,13275,422

(2) Related Information
Geographic Segments
Information by geographic region for the years ended March 31, 2020 and 2019 is summarized as follows:
Millions of Yen

Net sales:
Japan……………………………………
North America…………………………
Others……………………………………
Total…………………………………

2020¥87,307
16,12029,656¥133,084

2019¥86,425
16,89528,392¥131,713

Millions of Yen

Tangible fixed assets:
Japan……………………………………
Others……………………………………
Total…………………………………

2020¥18,713
7,356¥26,069

Thousands of U.S.dollars(Note 4)2020
$800,984
147,895
272,078$1,220,958
Thousands of U.S.dollars(Note 4)2020
$171,680
67,489$239,170

2019¥18,765
3,345¥22,111(3) Information on both "amortization of goodwill" and "unamortized balance" by reportable segments as at and for theyears ended March 31, 2020 and 2019 is summarized as follows:

Amortization of goodwill…………………
Unamortized balance………………………

Millions of Yen
2020
Reportable segments
Time information Environment
Total
system business system business
¥487
59
¥574
¥1,84374¥1,918Eliminations/
Corporate
–
–

Total
¥547
¥1,918Millions of Yen
2019

Amortization of goodwill…………………
Unamortized balance………………………

Reportable segments
Time information
Environment
system business system business¥485
60¥2,598135

Amortization of goodwill…………………
Unamortized balance………………………

Thousands of U.S.dollars (Note 4)
2020
Reportable segments
Eliminations/Time information Environment
Corporate
Total
system business system business$4,474545$5,019––$16,913683$17,597

Total¥545¥2,734

Eliminations/
Corporate
–
–

Total
¥545
¥2,734

Total$5,019$17,597(4) Information on "Impairment loss of fixed assets" by reportable segments for the years ended March 31, 2020 and2019 is summarized as follows:

Impairment loss……………………………

Millions of Yen
2020
Reportable segments
Time information Environment
Total
system business system business
¥198
–
¥198

Impairment loss……………………………

Thousands of U.S. dollars ( Note 4 )Reportable segments
Eliminations/Time information Environment
Corporate
Total
system business system business$1,816–$1,816–41

Eliminations/
Corporate
–

Total
¥198

Total
$1,816

22. Per Share Data
Net assets and net income per share as at and for the years ended March 31, 2020 and 2019 are as follows:(1) Net assets per share
Yen

Net assets per share …………………………………

2020¥1,454.47

The basis for these calculations is as follows:
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………………

U.S.dollars (Note 4)

2019¥1,417.86

Thousands of U.S.dollars(Note 4)

Millions of Yen

2020¥109,478
783(783)
108,6952020$13.3442019¥106,592
630(630)
105,9612020$1,004,392
7,185(7,185)997,202

SharesNumber of shares of common stock used tocompute net assets per share ………………………

2020

2019

74,731,928

74,733,204(2) Net income per share
Yen

Net income per share ………………………………

2020¥141.40

U.S.dollars (Note 4)

2019¥121.172020$1.297

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

Net income in the consolidated statement of income……
Net income relating to common stock …………

2020
¥10,567
10,5672019¥9,142
9,142

Thousands of U.S.dollars(Note 4)2020
$96,945
96,945

SharesAverage number of shares ofcommon stock outstanding during the year……

2020

2019

74,732,535

75,452,437(3) Shares remaining in trust of the Director's Compensation BIP Trust and the Employee Stock Ownership Plan (J-ESOP)

recognized in shareholders' equity as treasury stock are included in treasury stock to be deducted in the calculation of theaverage number of shares outstanding over the period to calculate net income per share and also included in treasuring stock
to be deducted in the calculation of the number of shares of treasury stock at the end of the period to calculate net assets
per share. The average number of shares of such treasury stock outstanding over the period that was deducted to calculate
net income per share was 314,300 shares for both the previous fiscal year and the current fiscal year. The number of sharesof treasury stock at the end of the period that was deducted to calculate net assets per share was 314,300 shares for both theprevious fiscal year and the current fiscal year.

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

71 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(Full-time) Audit & Supervisory Board Member

Izumi NAKAJIMA
President & Representative Director

Masahiko MORITA
Yasuhiro SASAYA

Hiroyuki TSUDA(Outside) Audit & Supervisory Board Member

Director & Operating Officer

Takehide ITONAGA
Hanae NAKAYA

Kunihiro IHARA
Manabu YAMAZAKI
Kirihito NINOMIYA
Fujinori TAZOManaging Operating Officer

Takeshi AKAGIMinoru YONEZAWA(Outside) Directorr

Operating Officers

Isao KISHI
Kiyoshi KAWASHIMA
Michinobu OMORI

Susumu IKOMA
Myeong-Jin JEON
Tetsuhiro KONDO

Sachio OTAKA
Yoshihiko HATA
Hiroyuki KOBARI
Hideo HONDA
Kouji AKIYAMA
Takeya HAYASHITANI
Takatoshi TAKAHASHI
Tetsuji ISHIKAWA

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.
23.		AMANO VIETNAM CO.,LTD.
15. AMANO KOREA CORPORATION
16. AMANO INTERNATIONAL TRADING(SHANGHAI)CO.,LTD.

10,11

13

6

12
15

14

19

22

5

AMANO CORPORATION

16,17
18

8

23

20
21

43

4
3

7
1,2

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/